CAD holds narrow range – Scotiabank

FXStreet Insights Team FXStreet

It’s another day of limited movement for the Canadian Dollar (CAD) with the US Dollar (USD) plying a familiar range in the low 1.40 region, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

CAD remains susceptible to risk sentiment

"Price action yesterday was illustrative of the fact that external forces remain a key driver of CAD short-term sentiment, with shifts in US equities helping drive the CAD’s intraday performance."

"More broadly, news of more potential auto production shifts from Canada to the US will add to the gloom hanging over the currency and while the CAD continues to look very 'cheap' relative to our fair value assessment (1.3781 today), there is little sign of funds realigning itself with our equilibrium estimate."

"The intraday and daily charts continue to reflect some USD-negative price signals from earlier this week and while the USD has edged back from Tuesday’s peak of 1.4080 (which is marked by a bearish 'shooting star' candle signal on the daily chart), USD losses are very limited still. USD support remains 1.3970/75 and 1.3930."

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 faces next resistance near 1.1930

EUR/USD continues to build on its recovery in the latter part of Wednesday’s session, with upside momentum accelerating as the pair retargets the key 1.1900 barrier amid a further loss of traction in the US Dollar. Attention now shifts squarely to the US data docket, with labour market figures and the always influential CPI releases due on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.