The Canadian dollar is gaining ground against its US counterpart as weakness in the greenback converges with emerging signs of progress toward a US-Canada trade agreement, according to Scotiabank strategists Shaun Osborne and Eric Theoret. The USD/CAD pair is experiencing downward pressure, positioning the loonie for potential appreciation toward the 1.35 to 1.37 range against the US dollar. This movement reflects broader dollar weakness across major currency pairs combined with optimism surrounding bilateral trade negotiations between Washington and Ottawa. Traders should monitor developments in trade discussions closely, as any concrete agreement could accelerate Canadian dollar strength while setbacks may reverse current momentum. The dual catalysts of systemic USD softness and improving trade sentiment are creating a favorable technical and fundamental backdrop for loonie bulls in the near term.
FXnCO Insight
Traders should watch for key resistance at 1.37 on USD/CAD as a potential entry point for short positions, while remaining alert to trade headline risks that could rapidly shift momentum.
Source: FXStreet