Scotiabank strategists Shaun Osborne and Eric Theoret spotlight renewed Canadian Greenback (CAD) weak point as softer Oil costs and geopolitical considerations push USD/CAD to new year-to-date highs. They describe a “heads I win, tails you lose” backdrop for the CAD, with the pair breaking above the March peak. Brief-term technicals flag an overbought USD however nonetheless level towards a check of the 1.40–1.41 congestion space.
CAD pressured as Oil and threat weigh
“The CAD probed the 1.39 space yesterday across the Financial institution of Canada coverage announcement however couldn’t maintain that benefit. Whereas Governor Macklem sounded cautious on the coverage outlook on the post-meeting press convention, CAD losses solely actually began to select up in late afternoon commerce as soon as markets began to worry about extra US strikes on Iran. “
“Now, although softer oil costs seem like the first driver of CAD losses in a single day, with the CAD promoting off in keeping with the NOK as Brent and WTI costs dropped.”
“It feels a bit “heads I win, tails you lose” for the CAD and this newest transfer leaves spot buying and selling at a brand new cycle excessive for the yr and the USD at its finest stage since early December. Firmer shares and a decrease VIX would possibly assist regular the CAD however there’s not a lot love in any respect on the market for the CAD proper now.”
“Impartial/bearish—USD-negative worth indicators that developed earlier within the week failed to supply any raise for the CAD and spot positive factors via the March peak at 1.3967 depart the CAD trying susceptible to extra losses once more.”
“The USD is overbought however pattern momentum stays bullish for a push into the 1.40-1.41 congestion vary from This autumn. Help is 1.3900. “
(This text was created with the assistance of an Synthetic Intelligence instrument and reviewed by an editor.)
