Scotiabank’s Analyst Team describes USD/CAD as little changed near the top of its year-to-date range, with conditions favouring at least a minor Canadian Dollar rebound as risk sentiment improves. They see spot trading roughly two big figures above their fair value estimate and note tomorrow’s Bank of Canada decision as the main event risk for the Canadian Dollar.

Range highs face consolidation

"The CAD is little changed. Conditions appear to be favourable for a minor rebound at least, with the USD drifting and risk sentiment leaning positive."

"Spot gains to retest the top of the YTD range for funds do not appear to have drawn out any significant CAD bargain-hunting even as spot remains close to two big figures above our fair value estimate (1.3758 this morning)."

"We continue to think 1.39+ levels offer some medium-term value for CAD buyers, however."

"Neutral—With a near pinpoint retest of the late March high (at 1.3967) achieved, the CAD may be able to steady for now. Short-term price signals lean modestly USD bearish but broader dynamics remain bullish."

"Stronger evidence to a top/reversal is needed to firm up the range ceiling that has held since the start of the year. Minor support is 1.3925 ahead of 1.3870. "

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)