USD/CAD neutral short-term – Scotiabank

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

Key Quotes

“The broader tone is set to remain dominant through the end of the week, as domestic risks fade following Wednesday’s surprisingly optimistic Bank of Canada tone. CAD drivers are providing support as oil prices stabilize around their recent lows and as USD-supportive yield spreads steady following their recent widening”.

“We maintain a bearish medium-term CAD bias, however the near-term risks appear balanced to the upside as we consider the broader turn in both fundamental drivers and sentiment”.

“Both the MACD and RSI have faded to neutral and USDCAD has fallen back below both its 50 and 100 day MA’s to trade at the mid-point of its ascending trend channel from early June. Both the channel and rising trend line off the May-June lows hint to support below 1.28. We look to the 21 day MA (1.2946) for clues to the near-term direction”.