The Canadian Dollar (CAD) is little changed on the session and consolidating yesterday’s gains as markets stabilize and investors await developments, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

Technicals point to further USD/CAD losses

"Speaking in Davos, PM Carney reiterated his perspectives on the changing global landscape and the passing of the 'rules-based international order' that compels Canada to forge new relationships. Surging commodity prices, led by metals, are not an obvious plus for the CAD at this point as domestic terms of trade remain dampened by sluggish crude oil prices (metals, especially copper, gains are more supportive of the AUD and CLP, for example). "

"The CAD is consolidating yesterday’s gains via a bearish wedge/flag pattern on the hourly chart. The pattern keeps the primary focus on the risk of more USDCAD losses in the short run. Recall that the loss of USD support in the mid-1.38 range targets a measured more drop in funds to 1.3785/90; losses may extend to the low/mid-1.37s below there. Resistance is 1.3850/55 ahead of 1.3890/00."