USD/CAD: Constructive undertone on the charts – Scotiabank

USD/CAD trades slightly higher. Economists at Scotiabank analyze the pair’s outlook.

Finding firm support on dips through the upper 1.37s

CAD sentiment is poor, weighed by concerns over slowing growth and soft commodity prices which are weighing on Canada’s terms of trade. Market positioning suggests investors are already aggressively short the CAD, however, which may limit the USD’s ability to advance significantly and might also leave markets vulnerable to CAD-positive surprises.

The USD remains resilient and is finding firm support on dips through the upper 1.37s. 

Price action is keeping the USD/CAD undertone constructive on the charts (bullish intraday and daily momentum signals) despite signs of USD softness elsewhere. 

Resistance is 1.3855 and 1.3895/1.3900. Support is 1.3780/1.3790.