Forex: USD/CAD erases gains back to 1.0069/74 area

FXstreet.com (Barcelona) - The USD/CAD failed to proceed towards the upside, easing back after a high at 1.0089. The cross has erased its gains back to 1.0069/74 (Tuesday and Wednesday close) and is still close from April lows at 1.0050. Since April 24 that the market has been tumbling across the chart, from just below 1.0300 to find support at 1.0050, yesterday. Investors will be watching US and Canada trade balance data.

“Canada’s international trade deficit is expected to narrow slightly to -$0.8bn in March from -$1.0bn in February. The balance of risk to this forecast is towards a wider deficit. Nonetheless, exports are expected to post a modest rebound following a 0.6% drop in the month before. Auto exports are expected to reverse a substantial portion of the 5.6% gain in February, reflecting a significant decline in auto production and US orders”, wrote TD Securities analyst Marcin Budkiewicz, adding that energy exports should be higher on the month off the back of higher commodity prices, while decent lumber exports should be sustained owing to continued housing construction in the US.

The US trade deficit is expected to narrow from -$43.0bn in February to -$42.0bn in March, but data might get ignored, “being wedged between the FOMC decision yesterday and nonfarm payrolls tomorrow”, said Budkiewicz.

Mataf.net analysts point to resistance at 1.0090, 1.0100 and 1.0120. On the downside, supports might be found at 1.0070, 1.0050 and 1.0000.