Scotiabank strategists Shaun Osborne and Eric Theoret report that the USD/CAD currency pair is experiencing downward pressure, driven by broad US Dollar weakness and tentative progress on a US-Canada trade deal [1]. The spot rate is currently trading below Scotiabank’s fair value estimate of 1.3800, with short-term technicals described as bearish. Resistance levels have been lowered, and further losses are expected, with the strategists targeting a move into the 1.35–1.37 range for USD/CAD [1].
The Canadian Dollar has posted a 0.3% gain, making it the second-best performing major currency after the New Zealand Dollar in intraday trading [1]. The tentative trade deal reportedly provides Canada with some relief on certain steel and aluminium tariffs and reduces auto tariffs, although the details are yet to be finalized and the domestic response to government concessions remains uncertain [1].
From a technical perspective, the sustained move of USD/CAD below retracement support at 1.3817, along with bearish alignment across intraday, daily, and weekly DMI oscillators, reinforces the downside focus and significantly limits the potential for a USD rebound. Resistance has dropped to the 1.3825/50 area, and Scotiabank continues to anticipate deeper USD losses toward the 1.35/1.37 range [1].
CONCLUSION
The Canadian Dollar is gaining strength against the US Dollar, supported by both technical factors and progress on trade negotiations. Scotiabank expects further downside for USD/CAD, with the pair likely to move into the 1.35–1.37 range as market sentiment remains bearish.