USD/CAD: A sustained break above 1.3720 to strengthen the USD – Scotiabank

The Canadian Dollar (CAD) has slipped a little in overnight trade, Scotiabank’s chief FX strategist Shaun Osborne notes.

Resistance above the market sits at 1.3750/55

“US Dollar (USD) gains are very marginal on the day but spot looks set to close net higher on the week for the first time since early June. After testing the recent range base around 1.36 last week, spot may drift a little higher in the near-term to test the early July high around 1.3750. Canadian Retail Sales are expected to decline 0.6% in May, in line with the flash estimate released with the April data last month."

"Ex-auto sales are forecast to fall 0.5% in the month. Weak data—while not a surprise—might solidify market expectations for a cut at next week’s BoC policy decision although the consensus forecast is narrowly divided and expects a 'hold'."

"Spot gains are holding close to yesterday’s peak in the USD around 1.3720 where potential trend resistance may be developing but gains through the low 1.37 zone do tilt near-term risks towards a bit more USD strength in the short run. Resistance above the market sits at 1.3750/55 and 1.3790/00. Intraday support is 1.3680/90."