USD/CAD outlook remains bullish – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, has reiterated the bullish perspective for the pair in the short term.

Key Quotes

“We remain CAD bears on the basis of relative policy and look to a renewed widening in U.S.- Canada yield spreads”.

“We note that CAD OIS have drifted back above the policy rate, pricing a slight (10%) chance of a 25bpt rate hike over the next 12 months”.

“USDCAD is struggling to make a sustained break above the 9 day MA (1.3066) and is consolidating around the mid-point of its one week range roughly bound between 1.29 and 1.32”.

“Technical signals are relatively muted with an RSI of 56 and a trend-less sub-25 DMI of 19. We look to support at 1.30 and near-term resistance around 1.3100. We maintain a bias to gains toward 1.33 and 1.35”.