The Canadian Dollar (CAD) has picked up a little ground intraday, reflecting the broader pressure on the US Dollar (USD), Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Post-Christmas USD rally shows signs of stalling

"The CAD has struggled in the past few weeks, reflecting some weakening in CAD fundamentals (weaker oil prices, soft terms of trade) while CAD-supportive spreads have remained little changed. Spot losses so far today bring the USD closer to our assessment of fair value (1.3857) and may signal some potential for improvement in the CAD in the short run on the back of a generally softer USD."

"Intraday price signals suggest the USD’s run higher over the post-Christmas period may be at least stalling. That was also the case on occasion last week but the broader context of the USD’s performance today suggests a stronger chance of the USD’s post-Christmas rally halting or even reversing."

"Price is forming an inside range pattern on the daily chart. If confirmed, the pattern should strengthen USD resistance in the low/mid 1.39s. Support is 1.3850."