USD/CAD – Looking For 1.24

USD/CAD is trying to find a base above 1.23. The latest NAFTA talks ended with U.S. trade representative Lighthizer saying “The U.S. views NAFTA as a very important agreement. We’re committed to moving forward. We hope for NAFTA breakthroughs next month, but the talks need to move at a faster pace,” before the next round begins in February. He also took a stab at Canada and their recent WTO complaint challenging the U.S.’ anti-dumping and anti-subsidy duties by calling them a “massive attack on all of our trade laws.” While the talks did not result in a complete abandonment of NAFTA, the U.S. isn’t exactly happy and possibility of President Trump taking another stab at trade relations Tuesday night poses a risk to the Canadian dollar. We believe it should only be a matter of time before USD/CAD recaptures 1.24.

Technically, the currency pair is still in a downtrend as long as it is trading below the 20-day SMA but the pair is above this same moving average on the 4 hour charts which opens the door to a move up to the 50-day SMA near 1.24. Although the moving average is below this key level, it is in USD/CAD’s nature to gravitate towards the round number.