The Canadian Dollar (CAD) has been relatively stable in recent sessions, according to Scotiabank’s chief FX strategist Shaun Osborne. Despite some brief movements above the 1.3725 area, the CAD has remained mostly flat over the past week. The USD is currently trading above Osborne’s estimated fair value, which could be impacting the CAD’s performance. Factors such as weaker crude prices and softer terms of trade may also be contributing to mild headwinds for the CAD in the short term.
In terms of economic indicators, Canada is set to release Manufacturing Sales, Housing Starts, and International Securities Transaction data. Preliminary data for June showed a significant 2.6% month-on-month drop in Manufacturing Sales, indicating potential challenges for the Canadian economy. The lack of a clear reversal in the USD sell-off could also impact the CAD’s performance, despite the currency failing to capitalize on the push below 1.3725 USD support. Overall, the broader outlook remains USD-negative, with support at 1.3675 and resistance at 1.3725/50.
As bulls may attempt to break above the 1.3725/50 level, it is essential to monitor key economic data releases and potential market trends that could impact the CAD’s performance. While the CAD has shown some resilience in the face of various challenges, including weaker crude prices and softer terms of trade, future movements will likely depend on a combination of external factors and domestic indicators. Maintaining a close eye on the USD sell-off and any signs of a reversal will be crucial in understanding the CAD’s potential direction in the coming days and weeks.
With the USD still trading above the estimated fair value and ongoing uncertainties in the global market, the CAD’s performance may continue to be influenced by a range of factors. The recent consolidation of spot gains and the development of a significant bear signal on the weekly charts suggest a cautious approach to trading the CAD. While resistance levels are set at 1.3725/50, support remains at 1.3675, highlighting potential price points to watch in the short term. By staying informed about the latest economic developments and market trends, traders can better navigate the fluctuations in the CAD’s value.
In conclusion, the Canadian Dollar’s performance in recent sessions has been relatively stable, with the currency facing challenges from weaker crude prices and softer terms of trade. As bulls may attempt to break above key resistance levels, monitoring economic data releases and potential market trends will be crucial. Despite the lack of a clear USD sell-off reversal, the broader outlook remains USD-negative, with support and resistance levels identified for potential price movements. By staying informed and adaptive to changing market conditions, traders can make informed decisions when trading the Canadian Dollar.
