USD/CAD should remain supported on moderate dips – Scotiabank

The Canadian dollar (CAD) has gained a little ground on the session. Economists at Scotiabank analyze Loonie’s outlook.

Technicals warrant attention

Spot losses from the intraday high on Wednesday leave a bit of a dent in the short-term technical outlook for USD/CAD. 

A bear reversal pattern developed on the 6-hour chart and the daily pattern of trade suggests a stall in the USD’s bull move against the 50% retracement resistance from the USD’s Q4 decline. This warrants close attention. 

Underlying trend momentum remains USD-bullish, suggesting that the USD should remain supported on minor dips for now. 

Initial support sits at 1.3440/1.3450. More important support is at 1.3410/1.3415; weakness below here would point to deeper USD losses.