Canadian Dollar: Bullish structure points to 1.35 handle against US Dollar – Scotiabank

FXStreet Insights Team FXStreet

Scotiabank strategists Shaun Osborne and Eric Theoret note that the Canadian Dollar (CAD) continues to show strength against the US Dollar (USD). CAD gains are supported by the broader dollar weakness, demand for high-beta currencies, narrowing front-end spreads, and fading uncertainty around US-Canada trade. Technically, they see scope for a deeper retracement of USD/CAD’s May-June rally, with potential for a move toward the 1.35 handle.

CAD fundamentals and charts support gains

"The CAD is slightly firmer on the session, reflecting the soft dollar tone overall as well as the bid for high beta FX at the margin."

"The CAD is outperforming the core European currencies but lagging the AUD and the NZD on the session. Underlying fundamentals remain CAD-positive. Front-end spreads have narrowed to the smallest (but still significant) gap since June and uncertainty related to US/Canada trade is slowly dissipating."

"Bearish—A solid 1% rise in the CAD this week keeps the technical picture bearish for the USD."

"Sustained weakness below retracement support at 1.3817 along with the bearish alignment of intraday, daily and weekly DMI oscillators maintains our technical focus on a deeper (perhaps full) retracement of the USD’s May/June rally back to 1.3550."

"Spot is nearing key, medium term support at 1.3715/30 ahead of the weekend. A push through here targets a 1.35 handle. Resistance is 1.3795/00."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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FXStreet Insights Team

FXStreet

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