North Korea raises worries in the market with the continues nuclear tests. Greenback has been subdued on Monday as U.S. markets were closed due to Labour Day, while the euro traders are expecting today’s Markit PMIs and ECB policy meeting on Thursday.
Brexit leader and U.K. PM Theresa May hinted for an extensive speech for the negotiations’ strategy of Britain’s way out of the European Union.
U.S. Dollar Subdued Due to Labor Day
The market looks like it stabilized amid escalating tensions from North Korea. They continued with the sixth nuclear test on Sunday and U.S. President Donald Trump criticized this as “hostile and dangerous” and warned for “massive military response”. He also hinted at withdrawing from the U.S.- Korea Free Agreement. The U.S. dollar has been traded weak against its majors, as out of the geopolitical risks, the U.S. country had a labour day on Monday.
USD/CAD – Technical Outlook
The U.S. dollar recorded a new more than two-year low at 1.2340 versus the Canadian dollar on Friday. The USD/CAD pair posted the fourth straight bearish month and plunged more than 9%. It is worth to mention that the price almost hit the 50-month SMA, so a scenario for an upside correction is possible. However, on a weekly basis, the price slipped beneath the 200-SMA.
Going to the short-term chart, the price is still developing below the 50-SMA, but if the price starts a bullish move will hit the aforementioned level near 1.2595. An alternative thought is a penetration of the 1.2340 support level and a fall until 1.2115. On the same chart, the RSI indicator is sloping slightly up in the negative territory, whilst the MACD oscillator is falling below both its trigger and zero lines.
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