Market Participants Betting on Nafta Deal between US and Canada

The Canadian Dollar strengthened to a two month high against US Dollar earlier this week. Market participants seem to bet on possible inclusion of Canada in a new Nafta pact. The U.S. has just concluded a successful bilateral talk with Mexico on Monday. Under the new agreement, cars need to have 75% of their content originate in the U.S and Mexico. The current Nafta requires 62.5% originate within North America. Under the new deal, 40-45% of auto content need to be made by workers who make more than $16 per hour, favoring the U.S. and Canada.

President Trump has threatened to put 25% tariffs on Canadian-made cars if a three-way deal can’t be reached. The major disagreement between Canada and U.S. is Canada’s insistence that the dairy supply management system is not open for negotiation. Trump has repeatedly said Canadian tariffs on some dairy products are unfair for U.S. producers. However, Prime Minister Trudeau on Wednesday has defended the supply management system that controls production of some Canadian farm products. The dairy issue is a difficult one for Prime Minister Justin Trudeau. The majority of domestic dairy industry is in Quebec and Ontario, and if they cave in the U.S. demands, they risk losing a lot of votes.

If a deal can be reached, the Bank of Canada can continue to focus on the domestic economy without worrying about trade disruption. Trump told reporters at White House on Wednesday that talks with Canada is going well. “They want to be part of the deal. And we gave till Friday and I think we’re probably on track.” Earlier this week Canadian Prime Minister Justin Trudeau said Canada is trying to reach agreement with the U.S. this week but won’t sacrifice its goal of getting the “right deal.” Talks with Canada should continue through the end of the week with aim to include Canada in trilateral deal. If the deal is successful, the Canadian Dollar may rally a lot further.

USDCAD shows a 5 swing sequence from 6.28.2018 high, favoring further downside while rally stays below 8/13 high (1.3178). A 5 swing sequence is part of 7 swing WXY or also often referred to as double correction. The structure calls for further downside to 1.265 – 1.275 area as far as current rally in swing #6 fails below 1.3178. A successful outcome of the Nafta talk this week could cause pair to extend lower as the chart is calling.

ElliottWave-Forecast has built its reputation on accurate technical analysis and a winning attitude. By successfully incorporating the Elliott Wave Theory with Market Correlation, Cycles, Proprietary Pivot System, we provide precise forecasts with up-to-date analysis for 50 instruments including FX majors, Gold, Silver, Copper, Oil, Natural Gas, Soybeans, Sugar ,Corn TNX and a number of Equity Indices from around the World. Our clients also have immediate... More

Disclainer: Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of experience and risk appetite. Do not invest or trade capital you cannot afford to lose. EME PROCESSING AND CONSULTING, LLC, THEIR REPRESENTATIVES, AND ANYONE WORKING FOR OR WITHIN is not responsible for any loss from any form of distributed advice, signal, analysis, or content. Again, we fully DISCLOSE to the Subscriber base that the Service as a whole, the individual Parties, Representatives, or owners shall not be liable to any and all Subscribers for any losses or damages as a result of any action taken by the Subscriber from any trade idea or signal posted on the website(s) distributed through any form of social-media, email, the website, and/or any other electronic, written, verbal, or future form of communication . All analysis, trading signals, trading recommendations, all charts, communicated interpretations of the wave counts, and all content from any media form produced by and/or the Representatives are solely the opinions and best efforts of the respective author(s). In general Forex instruments are highly leveraged, and traders can lose some or all of their initial margin funds. All content provided by is expressed in good faith and is intended to help Subscribers succeed in the marketplace, but it is never guaranteed. There is no “holy grail” to trading or forecasting the market and we are wrong sometimes like everyone else. Please understand and accept the risk involved when making any trading and/or investment decision. UNDERSTAND that all the content we provide is protected through copyright of EME PROCESSING AND CONSULTING, LLC. It is illegal to disseminate in any form of communication any part or all of our proprietary information without specific authorization. UNDERSTAND that you also agree to not allow persons that are not PAID SUBSCRIBERS to view any of the content not released publicly. IF YOU ARE FOUND TO BE IN VIOLATION OF THESE RESTRICTIONS you or your firm (as the Subscriber) will be sued and/or charged fully with no discount for one year subscription to our Premium Plus Plan at $1,799.88 for EACH person or firm who received any of our content illegally through the respected intermediary’s (Subscriber in violation of terms) channel(s) of communication.