The Canadian Dollar (CAD) traded flat against the US Dollar (USD) on Monday, holding steady near the five-month low reached late last week, according to Scotiabank Chief FX Strategists Shaun Osborne and Eric Theoret. Despite limited movement versus the Greenback, the Loonie continues to outperform most major peers on the crosses.
Focus on trade and jobs data
Scotiabank analysts noted that the underlying fundamentals remain stable, with yield spreads offering little directional guidance after their recent CAD-positive adjustment. “The CAD’s relative outperformance is notable, and it may benefit from continued political uncertainty in Japan and Europe,” they said. “The bullish reversal in oil prices is an added benefit and should offer additional support.”
Canada’s domestic data calendar this week is light, with trade figures due Tuesday and employment data set for release on Friday—both of which could provide fresh direction for the currency.
Technical outlook: USD/CAD consolidates near key resistance
Scotiabank’s fair value (FV) model for USD/CAD remains unchanged at 1.3704, still leaving a meaningful gap between fair value and current market levels. A narrower FV estimate based on two-year yield spreads places the pair closer to spot.
From a technical standpoint, the Relative Strength Index (RSI) sits in the mid-60s, suggesting ongoing bullish momentum as USD/CAD consolidates just above the 61.8% retracement of the September–February rally at 1.3944.
The 200-day moving average, located near 1.3985, is acting as immediate resistance, with the psychologically important 1.4000 level expected to pose an additional barrier. Analysts see the pair trading within a near-term range of 1.3900–1.3980.
