USD/CAD outlook neutral/bullish near term – Scotiabank

FX Strategist at Scotiabank Eric Theoret noted the neutral/bullish stance on the pair in the short term horizon.

Key Quotes

“Yield spreads have responded to the shift in the outlook for relative central bank policy with a renewed widening in the U.S.-Canada 2Y spread. OIS are also reflecting a slight increase in the risk of further easing over the next 12 months”.

“Momentum signals are neutral, the ADX is trendless, and USDCAD is quiet consolidating around the lower end of its multi-month range”.

“The broader-technical picture is bullish with Wednesday’s low bouncing off the ascending trendline from May and August”.

“The trendline suggests support at 1.2820. Wednesday’s gains were challenged above 1.29, and we would anticipate further near-term resistance above 1.2920”.