USD/CAD: technical picture looking more opaque

USD/CAD is consolidated in a 50 pip range with a technical picture that is looking more opaque, as explained by analysts at Scotiabank.

The nonfarm payrolls was a poor result for the US economy yet the market got back behind the greenback after the initial knee-jerk reaction to the downside, but USD/CAD bears have managed to keep a tight grip on the price below the 1.30 handle. However, analysts at Bank of Tokyo Mitsubishi explained that while the number was missing expectations, "It will likely take lightning to strike for the US dollar to weaken materially requiring a significant slowdown in employment growth similar to in May which prompted the Fed to delay the planned rate hike penciled in for June or July."

USD/CAD levels

"The USD’s stalled rally in the 1.3145 area (just above short-term retracement resistance) earlier this week has given way to some renewed USD softness but it is not (yet) obvious that this implies further losses for the market going forward. The stall on the week certainly raises the risk of a somewhat weaker USD but the 40-day MA is holding up the market intraday and there is a total lack of directional signaling from the short, medium and longer-term trend oscillators in USD/CAD now," explained that analysts at Scotiabank, adding, "This rather suggests the relatively sideways range trade will extend going forward. We expect support in the mid/upper 1.29s near-term and resistance near 1.31."