USD/CAD: Sideways movement suggests selling into upward moves – Scotiabank
Canadian Dollar Strengthens Slightly Against US Dollar
According to Scotiabank analysts Shaun Osborne and Eric Theoret, the Canadian Dollar finished the week with modest gains over the US Dollar, influenced by movements in both equity markets and oil prices. Their analysis suggests that the USD/CAD pair is likely to continue trading within a range, with resistance expected near 1.37, while technical indicators increasingly point to a weaker outlook for the US Dollar.
USD/CAD Expected to Face Resistance at 1.37
The current spot rate is just above their fair value estimate of 1.3625, but this difference is not considered substantial. The model's inputs are gradually shifting in favor of the Canadian Dollar, which should help restrict further advances by the US Dollar, assuming other factors remain unchanged.
Their forecast for the coming week predicts that the USD/CAD will continue to fluctuate within a 1.3581 to 1.3786 range, with a 75% probability. The analysts believe that any upward movement in the US Dollar is likely to be limited to the 1.37 level for the time being.
Additionally, the US Dollar is still trading below significant long-term resistance around 1.37. Earlier this month, the currency broke below trend support, triggering a bearish Head & Shoulders pattern.
Momentum indicators show that daily trends are weak but are beginning to signal a bearish outlook for the US Dollar. On both weekly and monthly timeframes, these indicators remain firmly negative for the USD.
(This report was generated with the assistance of artificial intelligence and subsequently reviewed by an editor.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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