The new trade agreement between the US-Mexico and Canada, USMCA, has been under discussion for a long time. Today it has become clear that all the obstacles have been overcome and the agreement has been concluded, and that the signing of the agreement by all the countries concerned will take place soon in Mexico.
US House of Representatives Speaker Nancy Pelosi now had a press conference to announce that the USMCA agreement has been reached. She also said:
-USMCA much better than NAFTA
-USMCA is a victory for American workers.
-The revised USMCA agreement includes better enforcement and stricter rules for the protection of employees.
-calls the USMCA agreement not only much better than NAFTA, but also better than what was initially proposed by the administration of pres. Trump.
-USMCA may be a “template” for further trade agreements concluded by the US with other countries.
So let’s take a look at how the Canadian dollar reacts to this.
Currently, USDCAD quotations are located in the inside bar area created by the growing, almost 100p day candle from Friday (06.12). Undoubtedly, the good data from the labour market in the USA were the fuel for buyers.
Quotations this week look much less impressive, their range is not able to go beyond the extremes of the inside bar.
If the market deems it beneficial for CAD to sign a contract, then overcoming the lower limit of the IB may be very likely. Looking at the graph from a purely technical point of view, the supply target may be the nearest demand zone from chart H4 – 1.3140.
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In the event of a breakout thru the top, the price will face the resistance of the old support of the triangle from which the pair broke thru the bottom on December 4th, when there were the first signs that the new trade agreement was already agreed by all parties.
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