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Scotiabank analysts Shaun Osborne and Eric Theoret note that the Canadian Dollar (CAD) has shown unique resilience against the US Dollar (USD) amid the US-Iran conflict, remaining the only major currency to hold steady. The USD/CAD pair is currently range-bound with a downside bias, suggesting potential weakness in the USD despite broader geopolitical tensions. Analysts attribute CAD's strength to factors like stable oil prices and Canada's economic fundamentals, which contrast with USD volatility driven by Middle East tensions. For forex traders, this dynamic highlights the CAD as a potential safe-haven asset in turbulent times. The pair's range-bound nature offers opportunities for range-trading strategies, while the downside bias signals caution for long positions. Geopolitical risks remain a key driver, with any escalation in US-Iran tensions likely to pressure the USD further. Investors should monitor OPEC+ output decisions and Canadian inflation data, which could influence CAD's trajectory. Additionally, shifts in US monetary policy or de-escalation in the Middle East may reverse the current bias. Technical levels around 1.3400 and 1.3200 are critical for near-term direction.
