The USD/CAD pair has been experiencing pressure due to lower US yields and narrower US/Canada spreads, as noted by Scotiabank’s Chief FX Strategist Shaun Osborne. Despite this, the Canadian dollar (CAD) is being supported by these narrower spreads. The USD is finding support around the upper 1.35 area, with firmer risk appetite and higher crude oil prices also contributing to CAD support. The fair value for USD/CAD has shifted lower to 1.3592, reflecting the factors that are favoring the CAD.
Looking ahead, Wholesale Sales for July are expected to decline by 1.1% in the month, in line with the previous month’s soft data. The short-term chart for the spot trends looks soft, and the USD’s movement below the 200-day Moving Average continues to give the daily chart a softer appearance. However, the USD is finding support around 1.3565 on the short-term chart, with trend indicators remaining bullishly aligned on the intraday and daily oscillators. The CAD will need to surpass the 1.3565 support level to make further improvements and potentially reach the low 1.35s, with resistance seen at 1.3605/25.
As the USD/CAD pair continues to face pressure from lower US yields and narrower spreads, the CAD has seen some support from firmer risk appetite and higher crude oil prices. The USD has found support around the upper 1.35 area, but the CAD will need to put in more effort to improve and potentially target the low 1.35s. Wholesale Sales for July are expected to decline, which could impact the pair in the short term. However, trend indicators on both the intraday and daily charts remain bullish for the USD, indicating that the CAD will need to break through key support levels to see further gains.
In conclusion, the USD/CAD pair is facing pressure from various factors, including lower US yields and narrower spreads. The CAD is finding support from these factors, as well as from firmer risk appetite and higher crude oil prices. Wholesale Sales data for July is expected to decline, which could impact the pair in the short term. Despite this, the USD is finding support at key levels, indicating bullish momentum. The CAD will need to break through resistance levels to see further gains against the USD.
