There is a subtle split in G10 FX performance on the day, with AUD and NZD strengthening and NOK trading a bit stronger overall, while JPY and CHF tend to underperform. The Canadian dollar (CAD) is unaffected by that high beta/safe haven split and is broadly unchanged on the session, notes Shaun Osborne, chief FX strategist at Scotiabank.
The pair still seems somewhat overrated
“There is a fair amount of Canadian data coming out in the coming days, but much of it is housing-related and may not have a significant impact on spot. CAD will continue to reflect external—rather than internal, fundamental—or technical developments for the time being.”
“Spot continues to look somewhat overvalued relative to our breakeven assessment (1.3676 today), which should at least help limit CAD losses. Spot remains relatively stable in the low 1.37s—around retracement support and the 40-day moving average at 1.2720/25.”
“But the CAD closed last week in a bullish fashion, with the USDCAD forming a large reversal after briefly trading above 1.39 and closing well below the previous week’s low (forming a key bearish reversal signal on the weekly chart). That should mean limited upside potential for the USD (resistance is at 1.3780/90) from here and incremental pressure on supports at the 1.36 highs/1.37 lows.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
