USD/CAD slips above 1.36 – Scotiabank

The Canadian dollar (CAD) is moderately firmer on the session as the USD slips back below 1.36 to a high of 1.35, notes Shaun Osborne, chief FX strategist at Scotiabank.

CAD is holding in the upper area of ​​1.35

“Factors have become slightly less supportive of the CAD over the past week, and lower terms of trade on the back of weaker commodity prices are a headwind for the CAD. CAD’s minor gains today are at odds with my fair value model, which points to an estimated spot equilibrium at 1.3657.”

“Intraday trends depend heavily on external developments – US data results, equity markets – with no internal data available. US CPI came in lower than expected so USD/CAD traded above 1.36 again.”

“Short-term price signals suggest that the USD rally has stalled, but with minor losses held in the 1.3585 area – the 200-day MA and USD resistance earlier this week – the short-term bullish trend remains intact. USD will need to trade back below 1.3545 to change the short-term trend dynamics at this point, I think. Otherwise, USD’s corrective gains risk extending deeper into 1.36s/top.”