USD/CAD: Initial support sits at 1.3760 – Scotiabank
|The Canadian Dollar (CAD) is on the defensive ahead of the Bank of Canada (BoC) policy decision, sliding to its lowest in three months against the US Dollar (USD). Oil has snapped 2%+ higher today but that will not alter CAD dynamics significantly, Scotiabank’s chief FX strategist Shaun Osborne notes.
The USD is heavily overbought on the intraday
“A quarter point cut from the BoC is more or less fully priced in at this point but the Bloomberg survey reflects a clear minority who favour a hold today. That seems unlikely based on the Bank’s track record. A hold today might also suggest that it was too quick off the mark in June with the first cut. The governor has sounded dovish and appears in a mood to ease.”
“Another cut is very likely to emerge today and the tone from the full suite of communications is likely to keep the door open to more cuts ahead. The CAD’s slide to 1.38 risks perhaps extending a little more but saving grace in the outlook at the moment is the IMM data reflecting an already heavily short CAD base exists in the market. Some profit-taking after the Bank decision might give the CAD a bit of a lift.”
There is no reason not to expect the USD’s steady advance from the 1.36 low reached on July 11th to extend. The USD has exceeded the June 11th high of 1.3790 so there is no clear impediment to the USD advancing to retest the April peak at 1.3846. The USD is heavily overbought on the intraday. Initial support sits at 1.3760, then 1.37.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.