CAD steadies on the daily chart - Scotiabank

The CAD is holding a minor gain on the broadly softer USD. Yesterday's CAD rally stalled after Trudeau confirmed he was stepping aside and Trump indicated that there would be no relenting in the application of tariffs, countering the earlier story in the Washington Post that had suggested a more selective approach to tariffs, Scotiabank's Chief FX Strategist Shaun Osborne notes.  

CAD manages to hold technical break versus USD

"To be fair to the Post, the report did say the thinking was coming from Trump's trade team so the push back may reflect the President's own policy approach. Or it may be that he does not want to be seen making any concessions before negotiations have even started."

"Markets perhaps detect a crack in the president-elect's hardline approach, however, which may provide some relief for the CAD and other currencies. The domestic political fog has hardly cleared by Trudeau announcement. The Liberals will select a new leader but opposition parties have already declared that they will not support the new government, meaning an election looks inevitable but is unlikely to occur before May/June perhaps."

"The CAD just about held the break under 1.4335 through the close yesterday, keeping alive the technical potential of a 1.4465 double top on the charts to deliver a push back in the USD to the low 1.42 zone in the next couple of weeks. Short-term technical momentum signals are shifting a bit more favorably for the CAD but the USD enjoys a lot of residual bull momentum on the longer run studies which will make the push lower a bit of a grind. Intraday support is 1.4275/80. Resistance is 1.4375/80."