Canadian Dollar: Upside focus into 1.35–1.37 against US Dollar – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret highlight that USD/CAD is under pressure as broad US Dollar (USD) weakness combines with tentative progress on a US-Canada trade deal. Spot is trading below the bank’s fair value estimate around 1.3800, while short-term technicals are described as bearish, with resistance lowered and further losses expected into the 1.35–1.37 range.
Bearish setup favors deeper CAD strength
"Broad dollar weakness and signs of progress on US/Canada trade are combining to drive the CAD higher. Intraday gains are modest but the CAD’s 0.3% rise is second only to the NZD among the major currencies."
"The tentative trade deal with the US appears to give Canada some breaks on certain steel and aluminium tariffs and reduce auto tariffs."
"Details have yet to be finalized and the domestic reception to concessions that the government has made to reach a deal remains to be seen. Spot is trading below our fair value estimate which continues to slide and sits at 1.3800 this morning."
"Bearish—The USD’s sustained push under retracement support at 1.3817 along with the bearish alignment of intraday, daily and weekly DMI oscillators maintains the technical focus on the downside and limits the USD’s rebound potential significantly."
"Resistance drops to 1.3825/50. We continue to look for more USD losses deeper into the 1.35/1.37 range."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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