The Canadian dollar (CAD) was little changed during the session and is consolidating yesterday’s gains as markets stabilize and investors await developments, report Sean Osborne and Eric Theort, chief FX strategist at Scotiabank.
Technical indicators point to further USD/CAD losses
“Speaking in Davos, Prime Minister Carney reiterated his views on the changing global landscape and the end of the ‘rules-based international order’ forcing Canada into new relationships. Rising commodity prices, led by metals, are not an obvious plus for the CAD at this stage as domestic trade terms remain weak due to slowing crude oil prices (gains for metals, especially copper, are more supportive for the AUD and CLP, for example).”
“CAD is consolidating yesterday’s gains with a bearish wedge/flag pattern on the hourly chart. This pattern maintains the primary focus on the risk of further USD/CAD losses in the short term. Remember, a loss of USD support in the mid-1.38 range targets a deeper drop in the money to 1.3785/90; losses may extend to the low/mid 1.37 level below there. Resistance lies at 1.3850/55 before 1.3890/00.”
