**Canadian Dollar Shows Technical Reversal Signals Against Greenback**
The Canadian Dollar is holding steady against the US Dollar near the 1.3800 level, but Scotiabank analysts Shaun Osborne and Eric Theoret are flagging potential reversal signals that could impact North American currency traders. The pair’s rally has stalled at the 200-day moving average, a key technical resistance level that often marks trend changes.
Scotiabank’s fair value estimate places USD/CAD at 1.3672, suggesting the US Dollar may be overextended by roughly 130 pips from equilibrium. This divergence between current trading levels and fair value indicates the recent USD strength against the loonie could be losing momentum.
The technical pause at this critical moving average raises questions about whether the greenback’s recent gains against CAD have run their course. Traders should monitor whether USD/CAD breaks through or rejects the 200-day MA in coming sessions.
**
FXnCO Insight
** Watch for a confirmed break below 1.3750 as a potential entry signal for CAD longs, with downside targets toward the 1.3672 fair value level.
Source: FXStreet