The Canadian Greenback (CAD) is extending its latest good points and buying and selling at contemporary marginal highs, reaching ranges final seen in early October, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
CAD actions are supported by narrower spreads and better oil costs
“The CAD’s power is basically pushed, reflecting an necessary shift within the outlook for relative central financial institution coverage, initially on the again of final week’s BoC and policymakers’ reluctant shift towards impartial and subsequently adopted by the newest softness in US CPI that has delivered a extra dovish repricing of Fed expectations.”
“The newest good points in oil are offering the CAD with an added increase. Our FV estimate for USD/CAD has fallen to a contemporary low, and is at present at 1.3681. We’d additionally like to focus on Scotiabank’s newest forecast replace, by which we see USD/CAD ending 2025 at 1.34 and 2026 at 1.28. USD/CAD’s technicals are bearish because it reaches contemporary multi-month lows and pushes towards 1.36.”
“The momentum indicators are bearish and the RSI is nearing the oversold threshold at 30, warranting some extent of warning. We proceed to focus on the absence of any main assist ranges forward of the September low at 1.3420. Quick-term assist is anticipated between 1.3600 and 1.3580. Quick-term resistance is now anticipated above 1.3700.”
