Global macro overview for 07/09/2018

The Canadian Dollar (CAD) did not find support in yesterday's statement of the Bank of Canada. In line with expectations, the bank kept the overnight interest rate unchanged at the level of 1.50%, but also refrained from suggesting whether a hike could be expected in October. Some have picked it up as a dovish signal, but the global investors should not be surprised by BoC, for whom the final of the NAFTA negotiations will mean much. And here the issue remains open, even if yesterday's comments from President Trump and Minister of Foreign Affairs of Canada Freeland sounded optimistic and suggested the end of negotiations by the end of the week. As a reminder, in the middle of last week we also heard that the talks are to end on (last) Friday. CAD may include a rally of concession if there is an agreement, but no one dares to jump into the trade without the details ready.

Let's now take a look at the USD/CAD technical picture at the H4 time frame. The market dropped towards the level of 1.3113 and bounced slightly. The momentum is below its fifty level and the market conditions are clearly overbought, so the downside correction might extend lower. In that case, the next target for bears would be at the level of 1.3102 and 1.3089, but if the falls will extend, the other technical support is seen at the level of 1.3000.


The material has been provided by InstaForex Company -