USD/CAD: Triangle consolidation caps upside – Scotiabank

FXStreet Insights Team FXStreet

Scotiabank Scotiabank analysts Shaun Osborne and Eric Theoret note the Canadian Dollar is slightly weaker but holding above 1.37, with USDCAD tracking broader Dollar moves. Their fair value estimate has edged up to 1.3625, reflecting less favourable drivers for the CAD. Technically, they see a broad consolidation, with strong resistance in the upper 1.36s and a potential bearish triangle between 1.3695/00 and 1.3525.

Resistance holds as fair value rises

"The CAD is marginally lower in overnight trade but remains comfortably above yesterday’s intraday low against the USD near 1.37."

"Our fair values estimate for USDCAD has edged a little higher to 1.3625 this morning, extending the moderately less favourable (for the CAD) shift in spot drivers seen over the past week."

"As expected, USD gains yesterday through the upper 1.36 were rebuffed by firm, long-term technical resistance (former trend support)."

"The USD gave up all of its intraday gains yesterday to close unchanged, setting a bearish “gravestone” doji on the daily chart which should strengthen resistance in the upper 1.36s."

"Price action may be carving out a wide triangle (bearish consolidation) pattern, capped but resistance at 1.3695/00, with the base at 1.3525 currently."

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

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FXStreet Insights Team

FXStreet

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