VOT Research Desk
Due to a lacklustre risk appetite, the Canadian dollar declines. However, according to Scotiabank experts, the technical picture indicates that risks for the USDCAD pair are skewed to the negative.
The choppy risk mood continues to dominate USDCAD sentiment, but given everything else (equities, volatility, spreads, commodities), our fair value assessment for spot at this time (1.3389) implies that the market is about where it should be.
On the advance over 1.3330, USDCAD has effectively triggered a little double bottom around 1.3230, which opens the door for a further squeeze up to the 1.3430 into the week’s final days.
Although daily Head and Shoulders formation is still in play, larger patterns continue to be bearish for the USD, and we continue to favour looking to short USD rallies.
