Fundamental Analysis of USD/CAD for August 29, 2018

USD/CAD has been quite impulsive with the bearish gains recently which has lead the price to reside below the 1.2950 area with a daily close. Despite the mixed economic reports on both USD and CAD published recently, CAD has gained momentum as of better results in comparison.

While US is currently quite busy dealing with Mexico trade policies other than NAFTA, it has been performing quite poorly with the recently published economic reports which resulted to certain weakness on the USD side against CAD. Recently, Bank of Canada Governor Poloz has spoken about the deployment of digital technologies helping the economy to grow and having an optimistic view for the further development of the Canadian economy in the process. The positive outlook did help the CAD buyers to regain momentum and push the price against USD more precisely.

Ahead of CAD GDP report to be published tomorrow which is expected to decrease to 0.1% from the previous value of 0.5%, today CAD Current Account report is going to be published which is expected to increase to -15.3B from the previous figure of -19.5B.

On the other hand, today USD Prelim GDP report is going to be published which is expected to have a slight decrease to 4.0% from the previous value of 4.1% and Pending Home Sales report is also expected to decrease to 0.3% from the previous value of 0.9%.

As of the current scenario, both currencies of the pair are expecting dovish outcome of the upcoming economic reports which is expected to inject certain volatility in the market. Though the final decision of definite pressure can be only made after the upcoming economic reports are published where certain spikes may be observed in the process. Though there are certain chances of strong counter of USD but having CAD performing well till now which might also impact the upcoming reports, CAD is expected to lead the price again in the long-term against USD.

Now let us look at the technical view. The price is currently residing below the 1.2950 area which was broken out with a daily close. The breakout was not quite as impulsive as expected to lead to further bearish momentum in the process for which certain bullish retracement is expected towards the 1.2950-1.3050 area before the price starts to push the price lower again in the coming days. As the price remains below 1.3050 with a daily close, the bearish bias is expected to continue with target towards the 1.2750 area.

SUPPORT: 1.2750

RESISTANCE: 1.2950, 1.3050

BIAS: BEARISH

MOMENTUM: IMPULSIVE

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The material has been provided by InstaForex Company - www.instaforex.com