CAD tracks USD moves as holiday liquidity keeps trading thin – Scotiabank

FXStreet Insights Team FXStreet

The Canadian Dollar (CAD) has largely followed broader US Dollar (USD) trends through the holiday period, with limited domestic catalysts so far. However, technical signals now suggest the USD rebound may be losing momentum, leaving room for CAD gains if upcoming Canadian data—especially Friday’s employment report—confirms relative economic resilience, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

USD/CAD rally shows signs of stalling near key resistance

"The CAD has been tracking the broader trend in the USD over the holiday period and intraday moves are extending that trend to a large extent. CAD-specific news and developments over the holiday period have been very limited (the Dec S&P Global Manufacturing PMI firmed modestly to a still soft 48.6). Canadian data releases pick up in the next few days and include PMIs, trade and jobs data."

"The CAD was able to leverage better than expected economic data to advance against the USD late last year and will be looking to pick up a bit more ground again if the trend in data—especially Friday’s employment report—continues to show (relative) strength. Intraday price action suggests the USD’s rebound from the Dec 26th low may be stalling."

"A 'hammer' low/reversal signal marked the late Dec base for the USD and intraday patterns so far today reflect the opposite—a 'hanging man' pattern on the candle chart. A lot may change between now and the end of the trading day, of course but the USD likely needs to push above 1.3810 to signal an extension of its New Year rally in the short run. USD support is 1.3750 and 1.3725."

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 trims gains, back below 1.1800

EUR/USD now loses some upside momentum, returning to the area below the 1.1800 support as the Greenback manages to regain some composure following the SCOTUS-led pullback earlier in the session.

GBP/USD off highs, recedes to the sub-1.3500 area

Following earlier highs north of 1.3500 the figure, GBP/USD now faces some renewed downside pressure, revisiting the 1.3490 zone as the US Dollar manages to regain some upside impulse in the latter part of the NA session on Friday.

Gold climbs to weekly tops, approaches $5,100/oz

Gold keeps the bid tone well in place at the end of the week, now hitting fresh weekly highs and retargeting the key $5,100 mark per troy ounce. The move higher in the yellow metal comes in response to ongoing geopolitical tensions in the Middle East and modest losses in the US Dollar.