The Canadian Dollar (CAD) and the Mexican Peso (MXN) are currently underperforming, despite the weakening of the US Dollar (USD) once again, according to Shaun Osborne, Chief FX Strategist at Scotiabank. The USD/CAD resistance is currently at 1.3750/75.
The CAD is struggling to break above the 1.37 mark, but managed to climb into the upper 1.36s before retracing. The decline in crude oil prices could hinder the CAD’s progress in the short term. However, the overall risk sentiment seems positive, although US equity futures are only showing slight gains so far.
Scotiabank’s fair value estimate for the CAD is at 1.3621, suggesting a positive shift in factors influencing the currency outlook. This shift is expected to help limit any potential rebounds in the USD in the near future.
Losses in the spot market have pushed the USD/CAD pair below key support levels, prompting a drop towards 1.3675. The currency pair may continue to see some losses in the near term, with resistance seen at 1.3750/75.
Despite initial gains, the CAD has started to give up some ground in early trading. However, the lack of support around the low 1.37s indicates potential for further CAD appreciation, albeit at a slow pace. The USD/CAD resistance level remains at 1.3750/75.
In conclusion, the CAD continues to face some challenges in breaking above the 1.37 mark but remains supported by positive shifts in currency outlook. The overall risk sentiment appears positive, although market movements are relatively subdued. Traders should keep an eye on key support and resistance levels for potential trading opportunities in the USD/CAD pair.
