The Canadian dollar was little changed against the US dollar, with markets largely unmoved by Quebec’s provincial election outcome. Political risk remains a medium-term drag, as the Parti Québécois minority victory leaves scope for a governing majority with the Conservatives, while the PQ leader has pledged a secession referendum within his first four-year term, timed for after the current US administration. Attention is also turning to Alberta, where the October 19 referendum is seen as a key sentiment risk for CAD, even as risk reversals are described as relatively muted.
Political Developments in Quebec and Alberta
The Canadian dollar was little changed against the US dollar, with markets largely unmoved by Quebec’s provincial election outcome. Political risk remains a medium-term drag, as the Parti Québécois minority victory leaves scope for a governing majority with the Conservatives, while the PQ leader has pledged a secession referendum within his first four-year term, timed for after the current US administration. Attention is also turning to Alberta, where the October 19 referendum is seen as a key sentiment risk for CAD, even as risk reversals are described as relatively muted.
USD/CAD Technical Analysis
In USD/CAD, the recent rally is characterised as technically stretched. A run of bearish reversal signals has been observed, including shooting star doji formations, while the RSI is described as extremely overbought around 80. The pair has struggled to sustain gains above the mid-1.42s, and support is seen as limited from current levels down to the psychologically important 1.40 area.
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