The Canadian Dollar (CAD) is trading flat against the US Dollar (USD) and extending its recent consolidation around a cluster of key technical levels, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret note.

Spreads and sentiment are neutral

"Near-term risk lies with the outlook for relative central bank policy as market participants focus on BoC Senior Deputy Governor Rogers’ speech at 8:15am ET. Yield spreads are steady, and offering little in terms of direction while the options market remains neutral with risk reversals holding close to flat."

"Our FV estimate for USD/CAD is currently at 1.3744, suggesting a significant undervaluation for the CAD at the moment. USD/CAD’s latest consolidation is notable, with congestion centered around the 61.8% retracement level of the September 2024/February 2025 rally at 1.3944."

"Resistance has been observed at the 200 day MA (1.3978), just below the psychologically important 1.40 level. Weakness below 1.3900 would likely target the 50 day MA at 1.3835. We look to a near-term range bound between 1.3920 and 1.3980."