USD/CAD: USD retains a firm undertone – Scotiabank
|The CAD retains a soft undertone, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
CAD remains under pressure on soft commodities
“Spot continues to trade well above out FV estimate (1.3581 today) but variables (such as softer commodities/terms of trade) are edging against the CAD somewhat which will likely keep the CAD tone defensive for now. There are no Canadian data reports due ahead of Friday’s employment report which may help settle expectations for the BoC policy at this month’s meeting.”
“Swaps are sitting on the 25/50 fence with 35bps priced in. Yesterday, former BoC Governor Beaudry suggested the Bank should cut 50bps at the upcoming meeting. The USD retains a firm undertone on the intraday and daily charts. The USD rise from last week’s low has barely paused and looks a little stretched on the intraday studies.”
“But, having pushed above the September peak and with intraday and daily DMI oscillators aligned supportively for the USD, a deeper push into the 1.36/1.38 congestion zone appears likely. Support is 1.3620.”
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