CAD is consolidating in recent range near high - Scotiabank

The CAD is entering Tuesday's NA session unchanged vs. the USD, its range tightly bound within a marginally bullish (USD/CAD bearish) trend channel from mid April, Scotiabank's Chief FX Strategist Shaun Osborne notes.

CAD is consolidating ahead of Trump/Carney meeting

"The focus is on international relations and the first meeting between newly elected PM Carney and President Trump in DC. The balance of risk is likely tilted to the downside, given the CAD's recent run of strength and the potential for disappointment following an impressive CAD rally driven by hopes of a reconciliation. In terms of data, Canada will release its international merchandise trade figures at 8:30am ET. These are for the month of March and will represent the state of trade ahead of the US tariff announcement in early April."

"Canada's deficit is expected to have widened modestly. USD/CAD's FV estimate remains steady just below 1.3900, slightly above current levels in spot, suggesting some CAD strength relative to our assessment of its fundamentals. Our CFTC weekly sentiment report release yesterday highlighted that CAD remains the largest held net short among the reporting currencies, leaving CAD bears vulnerable to adjustment and position squaring in the event of a continued rally.

"The recent trend in USD/CAD is gently bearish. The pace of the decline has been such that it represents a slowing in momentum and is therefore delivering positive divergence, with the RSI failing to confirm the fresh lows in spot. We look to near-term support below 1.3780 and see the possibility of further support around 1.3750 in the event of a break. We see near-term resistance in the 1.3880- 1.3900 range."