The Canadian Dollar (CAD) is trading flat from Friday’s close and extending its consolidation around the five month low it reached on Thursday, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Focus on trade and jobs data

"Fundamentals are steady, and yield spreads are offering little in terms of direction following their recent (CAD-positive) pullback. The CAD’s relative outperformance is notable, and it may benefit from continued political uncertainty in Japan and Europe. The bullish reversal in oil prices is an added benefit and should offer additional support. This week’s domestic release calendar is limited to trade (Tuesday) and jobs (Friday)."

"Our estimated FV estimate for USD/CAD is steady, at 1.3704, offering meaningful gap to current traded levels. A narrower FV estimate based solely on 2Y spreads is closer to spot. The RSI is currently in the mid-60s and implying bullish momentum as USD/CAD consolidates just above the 61.8% retracement (1.3944) of the September-February rally."

"The 200 day MA is offering near-term resistance just above current spot, at 1.3985, and we would anticipate considerable resistance at the psychologically important 1.40 level. We look to a near-term range bound between 1.3900 and 1.3980."