Scotiabank strategists Shaun Osborne and Eric Theoret notice the Canadian Greenback (CAD) is simply barely firmer versus the Greenback (USD) regardless of broad USD weak spot, however sees scope for a significant CAD restoration after a 1.4% Q1 decline. They stress CAD undervaluation versus honest worth at 1.3495 in USD/CAD and spotlight a brief‑time period vary round 1.3850–1.3950 as momentum indicators roll over.
CAD undervalued as vary varieties
“The CAD is getting into Wednesday’s NA session with a fractional 0.1% achieve vs. the USD, lagging its G10 friends in an setting of broad-based USD weak spot.”
“Broader developments are dominating, opening up the potential for a significant restoration within the CAD following a disappointing 1.4% decline in Q1. Danger reversals are confirming the shift in broader market sentiment and fading the premium for cover towards CAD weak spot (USD/CAD upside).”
“We proceed to focus on the CAD’s significant undervaluation to our evaluation of its basic equilibrium estimate. Our FV for USD/CAD is at present at 1.3495, revealing a big divergence to identify.”
“USD/CAD rally is displaying indicators of exhaustion with momentum pulling again from overbought ranges because the RSI drifts again beneath 70. Tuesday’s candle chart reveals a bearish reversal sign—a ‘taking pictures star’ doji—at ranges similar to the 61.8% retracement of the Sept 2024-Feb 2025 rally at 1.3944.”
“The drift beneath 1.3900 is essential, and we see restricted help forward of 1.3850. We glance to a near-term vary certain between 1.3850 and 1.3950.”
(This text was created with the assistance of an Synthetic Intelligence instrument and reviewed by an editor.)
