• USD/CAD edged higher on Tuesday as Canadian dollar weakened after slightly weaker Canada's merchandise trade data.
• Official data on Tuesday showed Canada’s merchandise trade deficit expanded to C$6.32 billion ($4.53 billion) in August, with exports falling faster than imports increased.
• Exports fell in August not only to the U.S., Canada’s largest trading partner, but also to other countries, contributing to the wider trade deficit.
• Canada’s international trade faced significant challenges earlier this year after U.S. President Donald Trump imposed sector-specific tariffs, forcing businesses to adjust and diversify supply chains away from their largest trading partner.
• Technical highlight upside risks for USD/CAD, with momentum studies, 5, 10 and 11 DMAs tracking north.
• Immediate resistance is located at 1.3988(23.6%fib), any close above will push the pair towards 1.4000(Psychological level).
• Support is seen at 1.3910 (38.2%fib) and break below could take the pair towards 1.3872 (SMA 20).
Recommendation: Good to buy around 1.3920, with stop loss of 1.3860, and target price of 1.4000
