USD/CAD: A return to the 1.35 area looks a reasonable target – Scotiabank

CAD stages bull reversal on weak USD. Economists at Scotiabank analyze USD/CAD outlook.

Resistance is 1.3685 and 1.3745/1.3750

USD/CAD closed out Friday near 1.3655, effectively signaling a big, bearish outside/key week reversal for the USD. The USD’s overbought status and the fact that oscillators were not ‘confirming’ the USD’s recent gains had highlighted the risk that USD strength was not sustainable. A quite definitive technical reversal appears to be confirming that now. 

The CAD is pushing below daily congestion in the 1.3665/1.3685 zone to start the week and a return to the 1.35 area in the next couple of weeks looks a reasonable technical target.

Resistance is 1.3685 and 1.3745/1.3750.