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.)

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.

GBP/USD retreats below 1.3650, looks to post strong weekly gains

GBP/USD loses its traction and trades below 1.3650 after touching its highest level since February above 1.3670 on the back of upbeat UK PMI data. The US Dollar (USD) shows some resilience against its peers, supported by the encouraging PMI prints, and limits the pair's upside. Still, GBP/USD remains on track to end the second consecutive week in positive territory.

EUR/USD stays below 1.1700 after US PMI data

EUR/USD corrects lower and trades below 1.1700 following the bullish action seen in the European session despite the mixed PMI prints from Germany and the Eurozone. Meanwhile, the US Dollar holds its ground heading into the weekend after PMI surveys reaffirmed healthy business activity in private sector. Nevertheless, the pair remains on track to post strong weekly gains.

Gold tests three-month highs near $4,600 as the US Dollar dives

Gold extends gains on Friday, with bulls aiming for a retest of the $4,600 resistance area, the top of the last six months' trading range. Precious metals are gaining momentum, favoured by a sharp US Dollar selloff, following the announcement of a US Treasury plan to boost liquidity to repurchase long-term securities.

Crypto Today: Bitcoin, Ethereum, XRP bulls accelerate rally amid rising ETF inflows

The cryptocurrency market remains bullish on Friday, led by Bitcoin’s surge above $77,000. Altcoins, including Ethereum and Ripple, mirror BTC’s positive outlook, trading near $2,400 and $1.35, respectively.

Week ahead – Fed’s Jackson Hole and Nvidia earnings to dictate markets

Kevin Warsh to make his Jackson Hole debut amid confusing messaging. But a major hawkish surprise unlikely after bond market intervention. Nvidia earnings to also determine market direction as stock rally cools.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.