Unlocking the Secrets of the Canadian Dollar’s Rise: Expert Analysis
The Canadian Dollar (CAD) has surged in value overnight, reflecting increased demand for risk assets in the financial markets. According to Scotiabank’s chief FX strategist, Shaun Osborne, there is potential for the CAD to continue its upward trajectory, with a possible break below 1.3725 on the horizon.
Osborne’s fair value estimate currently sits slightly below the spot price of 1.3723, indicating further room for the CAD to strengthen. However, it is crucial to note that the primary driving force behind the CAD’s performance is the overall market sentiment towards risk. The Bank of Canada will be releasing the summary of its July policy decision discussion later today, which could influence the CAD’s movement.
Following a period of significant depreciation in late July, the CAD has shown signs of a robust rebound on the charts. Both daily and weekly price signals for USD/CAD are bearish, suggesting a potential for further CAD gains. The spot price is approaching the 50% retracement level of the recent rally (1.3768), with a target range of 1.3675 to 1.3725. Resistance is expected at 1.3790.
Analysis Breakdown:
In simpler terms, the Canadian Dollar is on the rise due to increased investor interest in riskier assets. This trend is expected to continue, with the CAD potentially strengthening even further in the near term. The upcoming release of the Bank of Canada’s policy decision summary could provide additional insights into the currency’s future performance. Overall, this development in the forex market could have significant implications for individuals and businesses looking to trade or invest in Canadian currency.