CAD firms into low 1.38s on broad USD weakness – Scotiabank

FXStreet Insights Team FXStreet

The Canadian Dollar (CAD) has picked more ground this morning to reach the low 1.38s in a reflection of the broader weakness in the US Dollar (USD) rather than anything else, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD/CAD breaks key support, signals further downside

"The CAD is trading a little above our estimated fair value (1.3865) for the first time since the start of the year but a sustained or deeper slide in risk appetite in the short run could serve to slow or halt CAD gains absent any other CAD-positive drivers."

"Yesterday’s Canadian data reports reflected slightly firmer than expected inflation and a marginally better than forecast (but still subdued and largely historic now) Business Outlook Survey for Q4 to help the CAD at the margin but a generally weaker USD is the primary story today."

"USD/CAD losses through noted support and bear trigger at 1.3855/60 target short-term losses to 1.3790/95. Recent price action reflects USD gains stalling against the combination of the 50– and 100-day MAs in the high 1.38s and low 1.39s and (today) falling back under the 200-day MA signal (1.3837). Sustained USD losses over the week will reaffirm strong USD resistance in the low 1.39 zone and tilt medium-term risks towards more weakness."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD weakens to near 1.1900 as traders eye US data

The EUR/USD pair loses ground to around 1.1905, snapping the two-day winning streak during the early European trading hours on Tuesday. Markets might turn cautious ahead of the release of key US economic data, including US employment and inflation reports that were pushed back slightly due to the recently ended four-day government shutdown.

GBP/USD edges lower below 1.3700 on UK political risks, BoE rate cut bets

The GBP/USD pair trades on a weaker note around 1.3685 during the European session on Tuesday. The Pound Sterling edges lower against the US Dollar amid political risk in the United Kingdom and rising expectations of near-term Bank of England rate cuts.

Gold drifts lower as positive risk tone tempers safe-haven demand; downside seems limited

Gold drifts lower during the Asian session on Tuesday and snaps a two-day winning streak, though it lacks strong follow-through selling and shows some resilience below the $5,000 psychological mark amid mixed cues. The outcome of Japan's snap election on Sunday removes political uncertainty, which, along with signs of easing tensions in the Middle East, remains supportive of the upbeat market mood.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Follow the money, what USD/JPY in Tokyo is really telling you

Over the past two Tokyo sessions, this has not been a rate story. Not even close. Interest rate differentials have been spectators, not drivers. What has moved USD/JPY in local hours has been flow and flow alone.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.