USD/CAD remains bullish near-term – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, has noted the pair’s outlook remains on the bullish side in the short term.

Key Quotes

“Poloz’ speech scheduled for 7:10pm ET (text released at 6:55pm ET. The BoC’s September 7 policy statement had already flagged at downward ‘tilt’ to the inflation profile, and Friday’s 1.1% y/y print in headline CPI provided confirmation to the BoC’s cautious tone”.

“OIS are pricing a 32% chance of a 25bpt rate cut over the next 12 months, and the 2Y U.S.-Canada yield spread closed Friday at 23bpts—its highest level since late August at the upper end of its multi-month range”.

“USDCAD has bounced off 50 day MA (1.3049) support with a rally back toward the mid-September congestion range around 1.32. We look to further upside toward the 1.3250 resistance level. A break should see gains toward 1.33 and 1.35”.