USD/CAD: Risks easing a little more from a technical point of view – Scotiabank

The Canadian Dollar (CAD) remains pinned back to near its recent lows against the US Dollar (USD) in the upper 1.36s, where the USD has camped out for most of the week so far, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.

CAD slips on the day

"Markets are working on limited new information (little relevant data ahead of Friday’s Canadian jobs report and radio silence on trade) so its hardly surprising that the CAD is showing little ability to move at the moment."

"The broader USD rebound is contributing much of the lift under funds at the moment and, for the first time in a few days, factors influencing the CAD in our fair value model have stopped deteriorating, leaving today’s estimate equilibrium marginally lower than yesterday at 1.3586. That may help constrain the topside momentum in the USD absent any other developments."

"Spot is holding within its recent trading range but technical risks may have shifted a little higher, due to the flatter top and rising base (effectively a wedge pattern) that has developed on the intraday chart. Spot is also testing trend resistance (1.3665/75) on the daily chart which may point to spot gains extending to 1.3750/60 (June 27th high). Support is 1.3640."