Canadian Dollar slips as USD/CAD enters consolidation – Scotiabank
|The Canadian Dollar (CAD) is soft and entering Thursday’s NA session with a modest decline vs. the US Dollar (USD), Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.
CAD weakens modestly despite improving fundamentals
"Recent price action has leaned toward consolidation over the past week or so, as fundamentals have generally shifted in a more constructive manner with improvement in terms of trade (oil, gold) and a stabilization in spreads. Domestic rate expectations have remained steady, reflecting the BoC’s neutral messaging on policy."
"There are no BoC speaking engagements but we note the Business Outlook Survey set for January 18, ahead of the next decision and MPR release on January 28. Our FV estimate for USD/CAD reflects the recent improvement in CAD fundamentals, and is currently at 1.3812, suggesting a slight CAD premium (USD/CAD discount) to current spot."
"The recent rally from late December has shifted toward flat consolidation in a tight range around the 50 day MA (1.3882). Momentum is still leaning marginally bullish but appears to have softened. We continue to note the importance of key technical levels including the 38.2% retracement (1.3911) of the June/Nov rally, as well as the psychologically important 1.39 level, as well as the 200 day MA (1.3837) a level that roughly corresponds to the midpoint of the June/Nov range."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.