USD/CAD showed limited movement last week, and the lack of activity has continued in Monday trade. In the North American session, the pair is trading at 1.3295, up 0.08% on the day. On the fundamentals front, The ISM Manufacturing PMI. The index dipped to 48.1, down from 48.3 pts. Analysts had expected the index to improve to 49.2. This marked the fourth straight release below the 50-level, pointing to ongoing contraction in the manufacturing sector. In Canada, Manufacturing PMI ticked up to 51.4, up from 51.2 a month earlier.
Canadian GDP Soft, as Expected
The Canadian economy is expected to show soft growth in the third quarter, and this was reinforced on Friday. The monthly GDP report for September remained unchanged at 0.1%, matching the forecast. Analysts expect that growth will fall to 1.3% in the third quarter, down from an impressive 3.7% clip in Q2. The global trade war continues to take a toll on exports and business investment, and high levels of household debt is likely to constrain consumer spending. The picture is not very rosy on the inflation front either – the Raw Materials Price Index declined by 1.9% in October and hasn’t posted gains since July.
With USD/CAD showing little movement. The pair has tested the 1.3300 on Monday, and could break above this key line shortly. This line was last tested on October 9th. If the pair can break above this line, it has room to climb all the way to 1.3385, which is the next line of resistance.
On the downside, we have support at 1.3250. The 200-EMA and 50-EMA lines follow closely – the 200-EMA is at 1.3239 and the 50-EMA follows closely at 1.3233. These two lines appear headed for a crossover – if the 50-EMA breaks above the 200-EMA, this would be a bullish signal for the pair.
EUR/GBP has started the week with gains. Currently, the pair is trading at 0.8561, up 0.32% on the day.
Eurozone, German PMIs Boost EUR/GBP
The euro received a boost as eurozone and German Manufacturing PMIs both improved in November. The German PMI climbed to 44.1, up from 42.1. The all-eurozone PMI rose to 46.9, up from 45.9 pts. As well, both PMIs beat their estimates. In the U.K., Manufacturing PMI slipped to 48.9, down from 49.6 a month earlier. This beat the forecast of 48.3 pts.
The pair is flirting with the 0.8560 line, which has remained relevant since mid-November. Above, we find resistance at 0.8590. Note the 200-EMA, which continues to move towards the candlesticks. Currently, is at 0.8643. This is followed by resistance at the round number of 0.8700. On the downside, there is support at 0.8520, which is protecting the major support level at 0.8500.
This article was originally posted on FX Empire