CAD slips again however USD positive aspects must be capped within the higher 1.36s – Scotiabank
The Canadian Greenback (CAD) has slipped again in in a single day commerce however losses are marginal, Scotiabank’s Chief FX Strategists Shaun Osborne and Eric Theoret report.
USD/CAD to renew its drop in the direction of 1.3550
“The CAD pattern continues to (largely) mirror the broader tone within the USD however elements are shifting modestly within the CAD’s favour in our honest worth mannequin which estimates an equilibrium of 1.3545 for spot. GDP knowledge for April at this time (anticipated flat on the month, slower on the yr) mirror the challenges dealing with the financial system amid heightened commerce uncertainty. Smooth knowledge might weigh on the CAD to some extent intraday however the common USD temper suggests restricted scope for CAD losses.”
“Laws aiming to hurry up building and different main initiatives and scale back inner commerce boundaries superior by PM Carney has handed the Senate and can shortly develop into legislation. USDCAD short-term technicals: Bearish—The USD’s losses under the Head & Shoulders neckline set off famous in yesterday’s report prolonged to the low 1.36s earlier than the USD steadied.”
“The USD’s consolidation may even see the neckline retested within the brief run however 1.3670/75 ought to provide strong resistance, given solidly USD-bearish pattern momentum throughout the intraday, each day and weekly research. If that’s the case, the USD ought to resume its drop in the direction of the measured transfer goal (1.3550) implied by the Head & Shoulders sample. Sustained positive aspects by means of the higher 1.36s might retest the mid-1.37s.”
