USDCAD is under pressure from strong Canadian economic reports, firm oil prices, the prospect of a September BoC rate hike and an optimistic turn in the Nafta talks.The Chairman of the White House Council of Economic Advisors Kevin Hassett gushed about the “absolutely amazing” progress in the  Nafta negotiations, guessing that a deal could be reached in the fall. On Tuesday, USDCAD could be undermined further if  Canada May GDP beats the forecast of  0.3%, a healthy rebound from April’s 0.1% showing.  USDCAD dipped to 1.3038 in early New York trading this morning. Rumors of  good-sized  USDCAD selling due to month end portfolio rebalancing requirements may be adding to the downside pressure.

FX market started the week sluggishly.  The antipodean currencies and the Japanese yen traded sideways in narrow ranges.  European FX wasn’t much better initially, but price action got a tad perkier just as New York entered the fray.

There are three central bank meetings on tab this week including The Bank of Japan (BoJ) (Tuesday), the Federal Open Market Committee (FOMC) Wednesday, and the Bank of England (BoE) on Thursday.

BoJ meetings have been rather dull lately. This one could change that. There are rumors that they may tweak their yield curve management program, which some will see it as a sign that the ultra-easy monetary policy days are numbered.

Wednesday’s FOMC meeting may not cause much of a stir.  The Committee is expected to leave rates unchanged but keep the door wide-open for a September hike.

The BoE meeting, Quarterly Inflation Report and Mark Carney’s press conference may be the highlight of the week.  “Hard” Brexit concerns may cap GBPUSD gains from an expected 0.25% rate hike.

President Trump’s threat to shut-down the US government was a major reason FX traders were reluctant to get involved.  On Sunday, he tweeted “I would be willing to “shut down” government if the Democrats do not give us the votes for Border Security, which includes the Wall!  Must get rid of Lottery, Catch & Release etc. and finally, go to system of Immigration based on MERIT!  We need great people coming into our Country.”

There isn’t any domestic economic data due today. Ther US releases Pending Home Sales for June (Forecast 1.1% vs May -0.5%)

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish while prices are below 1.3090 and looking for a break below 1.3020 to lead to a test of the 1.2990-1.3005 area.  Below that area, additional support will be be found at 1.2950.  A break above 1.3090 would target 1.3120 and then 1.3190.  For today, USDCAD support is at 1.3020 and 1.3005.  Resistance is at 1.3080 and 1.3120.

Today’s Range 1.3010-1.3080