Canadian Dollar Unfazed by Quebec Election Amid Political Risks
The Canadian dollar remained stable against the US dollar, as markets showed little reaction to the outcome of Quebec’s provincial election. The Parti Québécois secured a minority victory, opening the door to a potential majority government with the Conservatives. The PQ leader has promised a secession referendum within his first four-year term, though it is scheduled for after the current US administration.
Meanwhile, attention is shifting to Alberta, where an upcoming October 19 referendum is viewed as a significant sentiment risk for the Canadian dollar. Despite this, risk reversals are currently described as relatively muted.
Technically, the USD/CAD pair is seen as stretched, with recent bearish reversal signals such as shooting star doji formations. The Relative Strength Index (RSI) is extremely overbought, hovering around 80. The pair has struggled to maintain gains above the mid-1.42s, with support limited down to the psychologically important 1.40 area.