USD/CAD: Range tests eye 1.4150 break – Scotiabank

Scotiabank’s Analyst Team notes that the Canadian Dollar has stabilized after its May–June selloff, helped by a peak and reversal in front-end spreads. The June labour report is seen as key, with consensus for modest job gains and steady unemployment. Stronger jobs, wages and hours could push USD/CAD back toward 1.4150 support, especially if softer US CPI narrows US/Canada spreads.

Jobs data and spreads guide CAD

"The CAD sell off through May/June appears to have stabilized, reflecting the peak and reversal in front-end spreads from the sharp widening seen over that period."

"Decent job gains, firm wages and more gains in hours worked would be positive for the CAD, which might make another run at 1.4150 support after dipping briefly below that point in overnight trade."

"It will need a clear narrowing in US/Canada spreads to pull the CAD more significantly higher, however."

"We remain confident that the 1.4250/00 range should continue to offer firm resistance to any USD advance now."

"A clear break under support at 1.4150 would be a bearish signal and prompt spot to test retracement support at 1.4075/80."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)