Title: Canadian Dollar (CAD) Holds Strong Against USD, Potential Test of Major Support Levels Predicted by Expert Analyst
The Canadian Dollar (CAD) is showing resilience against the USD, with gains remaining marginal as spot prices hover just above 1.36—a six-week high for the CAD, according to Scotiabank’s Chief FX Strategist Shaun Osborne.
Osborne notes that recent expectations of slightly weaker than anticipated CPI data have solidified market predictions of a 25bps rate cut by the Bank of Canada on September 4th. However, this development has not significantly altered the overall rate outlook.
Currently, spot prices are in line with Osborne’s fair value estimate of 1.3605. While recent CAD gains appear to be justified from a fundamental perspective, there may be limited room for further USD/CAD losses. Nonetheless, short-covering could potentially provide an additional boost to the CAD if USD/CAD losses deepen below 1.36.
The downward trend in USDCAD remains strong on both intraday and daily charts, with USD losses hovering just above a critical support level at 1.3595. A break below this support level could lead to a drop to 1.3550, setting the stage for a test of major support levels in the upper 1.34s. Resistance is currently seen at 1.3640/50.
In summary, the current market conditions indicate a potential test of major support levels for the CAD against the USD. Traders and investors should closely monitor price movements and key support/resistance levels to make informed decisions regarding their financial strategies.