Search ForexCrunch
  • Loonie goes on a tear to kick the week off, pushing an opening gap further wide.
  • Expectations of a successful NAFTA rework are seeing CAD bulls pile into markets.

The USD/CAD has tumbled into 1.2820, with the week’s opening gap from 1.2910 steepening the decline as headlines begin to cross wires that Canada and the US may have reached an agreement on NAFTA after months of stalled talks.

US and Canadian trade negotiators hammered out the finer details of a NAFTA rework over the weekend, ahead of the US’ self-imposed deadline of midnight Sunday (04:00 GMT).

While no official joint statements are immediately forthcoming, word is coming from anonymous sources that a final deal is being inked, and the CAD has rebounded even before word of a final deal began to surface, with CAD lurching forward  against the US Dollar as repeated announcements that the two sides were “close” to reaching a deal continued to leak out over the weekend, and Monday sees the CAD in a firmly bullish stance as traders anticipate a successful rework of NAFTA.

USD/CAD levels to watch

The USD/CAD pairing is now trading back underneath the 200-day EMA at 1.2870, and the Loonie is trading at a four-month high against the Greenback, and the next major support level is seen at 1.2730 near May’s swing lows.