CAD trading flat vs. USD – Scotiabank

FXStreet Insights Team FXStreet

The Canadian Dollar (CAD) is trading flat against the US Dollar (USD), having recovered its Asian session losses through the start of early European trade, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Spreads remain steady offering no fundamental direction

"Wednesday’s 25bpt BoC cut was well received and was paired with a notably neutral bias that offered no clear signal in terms of forward guidance on rates. The outlook for relative central bank policy has stabilized and 2Y US-Canada spreads have held steady for over a week, reflecting a stabilization in fundamentals for the CAD."

"Domestic rate expectations remain dovish but markets are softening the extent of easing that is currently being priced into markets, with a cumulative 21bpts of cuts priced in by December. For now, we look to Friday’s retail sales and the monthly GDP figures scheduled for September 26. Our FV estimate for USDCAD is currently at 1.3586 and sentiment is bullish, with the options market (risk reversals) pricing a slight premium for protection against CAD upside."

"The technical picture remains bearish with a sub-50 RSI and price action that now appears capped by resistance around the 50 day MA (1.3774) trend level. We continue to highlight the importance of the recent head and shoulders bearish reversal pattern offering a measured move target to the mid-1.35s, around the lows from mid-June. We look to a near-term range bound between 1.3700 and 1.3800."

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 flat lines below 1.1900; divergent Fed-ECB expectations offer support

The EUR/USD pair struggles to capitalize on the overnight bounce from the 1.1835-1.1830 region and oscillates in a narrow band during the Asian session on Thursday. Spot prices currently trade around the 1.1875 area, remaining nearly unchanged for the day and staying within striking distance of an over one-week high, reached on Tuesday, amid mixed cues.

GBP/USD slips heading into the Thursday trading window

The Pound Sterling pulled back from four-year highs on Wednesday, weighed down by a combination of Bank of England dovishness and UK political uncertainty, even as the US Dollar weakened on soft labor market revisions.

Gold posts modest gains above $5,050 as US-Iran tensions persist despite strong labor data

Gold price trades in positive territory near $5,060 during the early Asian session on Thursday. The precious metal edges higher despite stronger-than-expected US employment data. The release of the US Consumer Price Index inflation report will take center stage later on Friday.

Bitcoin holds steady despite strong US labour market

Bitcoin briefly bounced from $66,000 to above $68,000 but slightly reversed those gains following Wednesday's US January jobs report. The top crypto is hovering around $67,000, down 2% over the past 24 hours as of writing on Wednesday.

The market trades the path not the past

The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.

XRP sell-off deepens amid weak retail interest, risk-off sentiment

Ripple (XRP) is edging lower around $1.36 at the time of writing on Wednesday, weighed down by low retail interest and macroeconomic uncertainty, which is accelerating risk-off sentiment.