USD/CAD: Range risks tilt higher – Scotiabank

Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) is quiet against the Dollar, lagging most G10 peers as yield spreads move in favor of the USD after the Fed and Bank of Canada (BoC) meetings. The bank’s fair value estimate for USD/CAD has risen toward 1.35, while technicals point to a neutral-to-bullish bias within a 1.3700–1.3750 range.

CAD lags as spreads back Dollar

"The CAD is quiet, entering Thursday’s NA session unchanged vs. the USD while underperforming most of its G10 peers."

"The outlook for relative central bank policy is shifting in the aftermath of Wednesday’s Fed/BoC meetings, with yield spreads widening in response to the Fed’s softened dovish guidance."

"Our FV estimate for USD/CAD has climbed to 1.3498, largely reflecting the move in yield spreads."

"Neutral/bullish—risks for USD/CAD are shifting with a notable rise in the RSI suggesting bullish momentum. Ultimately, we remain neutral below 1.3750 but acknowledge the potential for a break."

"We would anticipate meaningful resistance around the 200 day MA at 1.3802. We look to a near-term range bound between 1.3700 and 1.3750."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)