USD/CAD: Upward momentum aims for the lower 1.39 range – Scotiabank

Canadian Dollar Holds Firm Despite Cautious Market Mood

According to Scotiabank analysts Shaun Osborne and Eric Theoret, the Canadian Dollar (CAD) is maintaining a stable to slightly stronger position against the US Dollar, even as overall market sentiment remains subdued. This resilience is partly attributed to a mild uptick in demand for commodity-linked currencies. They also note that historically, April has been a favorable month for the CAD since the 1970s, and that USD/CAD has recently climbed above its 200-day moving average, suggesting the potential for further gains toward the low 1.39 range.

Seasonal Strength Supports Bullish Technical Outlook

Osborne and Theoret observe that the CAD is showing slight gains against the USD, mirroring the performance of other commodity currencies despite a lackluster appetite for risk. With March coming to a close, the CAD could benefit from seasonal patterns in the upcoming month.

Historically, April has delivered a notable boost for the Canadian Dollar, making it a consistently positive period for the currency relative to the USD since the early 1970s. While recent years have shown more subtle movements, the general trend of CAD strengthening in April persists.

With spot prices moving above the 200-day moving average at 1.3806 this week and short-term bullish momentum intact, technical analysis points to further upside for USD/CAD, with targets set near the low 1.39s. Key support levels are identified at 1.3790/00 and 1.3750/60.

(This report was produced with the assistance of artificial intelligence and subsequently reviewed by an editor.)