USD/CAD: Bear trend intact below 1.3645 – Scotiabank

FXStreetMay 7, 2026 1:53 PM

Scotiabank strategists Shaun Osborne and Eric Theoret note the Canadian Dollar (CAD) is little changed as traders await US/Iran headlines and Friday’s Canadian employment data. USD/CAD trades near 1.36, with spot still above Scotiabank’s fair value estimate around 1.3514. The bank highlights a broader USD/CAD downtrend, viewing recent gains as a bear flag within a still bearish technical backdrop.

Bearish setup capped near resistance

"The CAD is little changed on the session. With risk appetite suitably in check and awaiting news on US/Iran peace discussions while crude oil prices remain subdued, there is little incentive for the CAD to push recent gains."

"Equally though, the CAD remains short-changed relative to out fair value estimate—which has pushed a little higher to 1.3514 today in response to stocks/crude market moves."

"With no domestic data today and Canadian employment report due tomorrow, there is even less incentive to push the CAD decisively either way today. "

"Bearish—The USD crept above resistance in the low 1.36 range (1.3625/30) yesterday and remains close to that level this morning. The USD’s push higher has blunted CAD momentum to some extent but the broader downtrend in USDCAD remains intact and price action through European trade is mildly USD-negative."

"Technicals retain a generally USD-bearish undertone, with USD gains from last Friday effectively forming a bear flag pattern on the short-term chart. USD losses should resume below 1.3590. Resistance is marked a little higher at 1.3645/50 now. "

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

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