One of the biggest stories next week could be a NAFTA deal. In the past week, both President Trump and Prime Minister Trudeau have said that significant progress has been made and its widely believed that a preliminary agreement will be announced at the summit in Peru beginning on Friday April 13. With the Mexican elections fast approaching, if Trump wants a deal during a time when meaningful policy changes can still be made according to White House trade adviser Peter Navarro, “its got to be soon,” which means “2 weeks to 30 days.” Although Canada’s trade deficit widened more than expected, job growth was very strong in March with more than 32.3K jobs added, 68.3K of which were full time hires. There are no major Canadian economic reports scheduled for release in the week ahead so if a NAFTA deal is announced, it could take USD/CAD to 1.26 quickly.
Technically, there’s a lot of support below current levels for USD/CAD. On Friday, the pair’s decline was halted by the 50-day SMA near 1.2740. Even if the pair breaks below that level, the 100-day SMA and 200-week SMA sit right at 1.2700. A break below 1.2675 would be needed for an accelerated move lower.