FxWirePro: USDCAD hits 1-week high on NAFTA concerns, good to buy on dips

As per our analysis USDCAD has shown a major jump of more than 150 pips and hits our target of 1.30250. US fed has increased interest rates by 25bpbs and said that it would raise another quarter point by this year,three more next year and one in 2020. US 10 year bond yield has lost more than 2% after the fed monetary policy.

Canada is not making any concession and is expected to miss this week deadline to make deal with US. US is ready to sign new NAFTA with Mexico without Canada. US trade representative Robert Lighthizer. He said that US will be signing before Mexican President Enrique leaves office Sep 30th .

The pair is facing strong resistance around 1.3050 (100- day MA) and any break above targets 1.3100/1.3175.

Oil prices shown a minor decline of more than $1 after release of US crude oil inventory. US crude inventories increased by 1.9 million this week compared to forecast of decline of 1.3 million barre But downside is capped due to Iran sanctions.It is trading above $72 and a jump till 74 is likely. The sudden jump in oil price is supporting Canadian dollar.

The near term support is around 1.3020 and any break below will drag the pair down till 1.2965/1.2880/1.2850.The pair should close below 1.2850 for further bearishness.

It is good to buy on dips around 1.3000 with SL around 1.2960 for the TP of 1.3100/1.3175