USD/CAD: May try to test the 1.3475 support – Scotiabank

FXStreet Insights Team FXStreet

The Canadian Dollar (CAD) is trading a bit off its overnight peak around 1.3575 but retains a generally firm undertone. The pro-risk mood might be extending CAD sentiment a little support, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

More USD/CAD weakness ahead

“A likelier explanation for CAD gains is that we may be seeing the impact of the record net CAD short positions reflected in the recent CFTC data feeling increasingly uncomfortable with CAD strength. Net short CAD activity picked up sharply through mid-year, reflecting weaker cyclical dynamics and the BoC’s relatively early start to the easing cycle.”

“Like previous (though less significant) ramp ups in net selling of the CAD (in April and November last year), the latest CAD slide stopped around 1.39 and now, the CAD’s three week advance from that low may be squeezing weaker CAD short hands and giving the CAD a short-covering lift. Spot losses have extended marginally below 1.3595 to reach a four-month low for the USD.”

“Trend strength signals are aligned bearishly for USD/CAD on the intraday and daily DMI oscillators while the weekly study is close to flipping bearish. Losses below 1.3590/95 (200-day MA and range lows from May and July) are marginal but suggest more USD/CAD weakness ahead. Support is 1.3560 (50% retracement of the 2024 USD rally) and 1.3475 (retracement and major trend). Resistance is 1.3625/50.”

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.

AUD/USD seems vulnerable near 0.6800, 10-month low amid bullish USD

AUD/USD languishes near a 10-month low during the Asian session on Friday, awaiting a break below 0.6800 before the next leg up amid a bullish US Dollar. Firming Fed rate-hike expectations, along with fading hopes for US-Iran diplomacy, help the USD hold gains at its highest level since April 2025. Moreover, the RBA’s dovish tilt undermines the Aussie and backs the case for further losses.

USD/JPY bulls turn cautious near 160.00 amid intervention risks

USD/JPY enters a bullish consolidation phase around its highest level since early September as bulls turn cautious amid intervention risk near 160.00. Meanwhile, the downside seems cushioned as the wide US-Japan interest rate gap keeps the Yen carry trade active. Furthermore, the possibility of a jumbo Fed rate hike and Middle East uncertainties hold the US Dollar near a 19-month top, supporting the currency pair.

Gold sticks to gains above $3,900; bulls lack conviction as Fed and Iran risks support USD

Gold clings to modest recovery gains above the $3,900 mark during the Asian session, snapping its three-day losing streak to the lowest level since late September set the previous day. The US Dollar takes a breather after a strong three-day rally to its highest level since April 2025, offering some support to the commodity. However, firming US Federal Reserve rate-hike expectations and Middle East uncertainties continue to support the Greenback. This keeps a lid on any further upside for the precious metal.

Bitcoin slips below $70,000 for the first time since August

Bitcoin is attracting some serious sellers, pushing it below $70,000 on Friday after an over 3% decline the previous day. The Crypto King is down over 5% so far this week, and a bearish close could mark its sixth consecutive week of losses. The technical outlook for Bitcoin is bearish, with sellers tightening their grip despite overextending the downtrend to oversold levels.

Asian stocks post mixed results amid Nvidia leadership turmoil, Anthropic IPO buzz

Asian stocks post mixed results on Friday, with Japan’s Nikkei 225 Index climbing 0.91% to around 61,370 and China’s Shanghai Composite rising 0.22% to 3,660. Conversely, Hong Kong’s Hang Seng Index fell 0.82% to 23,810, while South Korea’s KOSPI declined 0.49% to near 5,320.

What the US CPI headline doesn’t tell you about inflation

Brent crude has fallen about a third since mid-October on hopes the Iran war is ending, but diesel, freight and fertiliser costs haven't followed. Those costs reach US consumer prices in stages through 2027 and could keep inflation high after gasoline gets cheaper.