USD/CAD: Oversold condition in the USD is developing – Scotiabank

FXStreet Insights Team FXStreet

The Canadian Dollar (CAD) is little changed on the session, leaving spot pressed back up against yesterday’s intraday low around 1.3468, Scotiabank’s Chief FX Strategist Shaun Osborne notes

CAD holds gains in upper 1.34s

“While factors continue to shift favourably for the CAD in broad terms, spot is trading further below our fair value estimate (1.3529) today. General USD weakness accounts for some of the discrepancy but position adjustment (CAD short covering) is also a likely driver of the CAD’s buoyancy at the moment.”

“Friday’s CFTC data reflected only a mild reduction in the recent build-up of (hefty) CAD shorting activity in the week through last Tuesday. Spot retains a weak technical undertone.

“Steady losses over the past four weeks have pushed the USD back to 1.3475 retracement support (61.8% of the 2024 move up) and trend strength oscillators are aligned bearishly across the intraday, daily and weekly studies. This tilts risks towards more USD weakness and suggests limited scope for USD rebounds. Oscillators are warning that an oversold condition in the USD is developing, however.”

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 struggles near 1.1850, with all eyes on US CPI data

EUR/USD holds losses while keeping its range near 1.1850 in European trading on Friday. A broadly cautious market environment paired with a steady US Dollar undermines the pair ahead of the critical US CPI data. Meanwhile, the Eurozone Q4 GDP second estimate has little to no impact on the Euro.

GBP/USD recovers above 1.3600, awaits US CPI for fresh impetus

GBP/USD recovers some ground above 1.3600 in the European session on Friday, though it lacks bullish conviction. The US Dollar remains supported amid a softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold remains below $5,000 as US inflation report looms

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains in the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

The weekender: When software turns the blade on itself

Autonomous AI does not just threaten trucking companies and call centers. It challenges the cognitive toll booths that legacy software has charged for decades. This is not a forecast. No one truly knows the end state of AI.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.