According to Shaun Osborne, Chief FX Strategist at Scotiabank, the USD/CAD pair is facing pressure due to lower US yields and narrower spreads between the US and Canada. The Canadian dollar (CAD) is being supported by these factors, with the pair hovering around the upper 1.35 area.
Osborne notes, “Firmer risk appetite and higher crude prices are also contributing to CAD’s strength. USD/CAD fair value has decreased to 1.3592, reflecting the shift in favor of the CAD.”
Looking ahead, Wholesale Sales for July are expected to decline by 1.1%, in line with previous estimates. Despite some softness in spot trends on the short-term chart, the USD is finding support around 1.3565. Resistance levels are seen at 1.3605/25.
Overall, while the USD is facing some pressure, the CAD is gaining strength supported by various factors. Traders should keep an eye on key levels and market indicators to make informed trading decisions.