USD/CAD short term stance neutral-bullish – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, noted the neutral-bullish stance on the pair in the near term.

Key Quotes

“CAD continues to ignore its typical drivers (oil, relative central bank policy), taking its cues from the broader market tone in an environment of widespread USD weakness. We remain CAD bears on the basis of relative central bank policy and highlight the risk of CAD weakness into next week’s BoC events as policymakers assess the implications of recent CPI and GDP disappointments”.

“Momentum signals are bearish and extended, however we note their failure to confirm the recent lows in spot, delivering positive divergence. 200 day MA (1.31) support has held on a closing basis, and the shorter-term (hourly) charts are suggestive of an impressive turn off Thursday’s lows. We look to near-term resistance at 1.3180 and 1.3250”.