CAD Treads Water Against USD Amid Resistance Zone
The Canadian Dollar (CAD) is holding steady against the US Dollar (USD), despite being slightly softer in value. Scotiabank strategists Shaun Osborne and Eric Theoret note that firmer oil prices are providing some support for the CAD, as well as steady front-end US-Canada yield spreads.
However, they emphasize a significant resistance zone between the low/mid 1.39s, which could limit further gains in the USD/CAD exchange rate. The strategists also highlight that persistent core Consumer Price Index (CPI) pressures are keeping focus on the Bank of Canada's normalization plans later this year.
According to Osborne and Theoret, USD gains through the mid/upper-1.38s point to short-term USD strength extending further. They note initial USD support at 1.3825/30 and 1.3730/60.