Scotiabank strategists Shaun Osborne and Eric Theoret observe the Canadian Greenback (CAD) is making modest positive factors versus a softer US Greenback (USD), although it lags core majors and weakens on crosses. They estimate USD/CAD equilibrium at 1.3527, with undervaluation correcting primarily by way of Greenback softness. Seasonality is strongly bearish for USD/CAD in April, whereas current political developments are seen as marginal for the foreign money outlook.
Technical break reinforces April seasonals
“The CAD is making just a little headway in opposition to a usually softer USD this morning however positive factors are lagging versus the core majors, leaving the CAD slipping just a little on the important thing crosses.”
“The CAD’s undervaluation (equilibrium is estimated at 1.3527 presently) is slowly correcting however the course of could also be gradual and contingent (largely) on the USD softening slightly than the CAD strengthening.”
“USD/CAD seasonality is strongly bearish in April, nonetheless.”
“Bearish—USD/CAD technicals lean bearish after USD losses broke development help off the early March low final week and crashed via necessary help (200-day MA and the 38.2% retracement of the March rally) round 1.38 yesterday.”
“Losses are nearing the 50% retracement of the March bounce within the USD (1.3745) however strengthening short-term development momentum suggests a slide to the higher 1.36s (1.3690 is the 61.8% retracement) is an apparent threat.”
(This text was created with the assistance of an Synthetic Intelligence instrument and reviewed by an editor.)
