USD/CAD: threatening the 100-D SMA first time since mid-April - Scotiabank

Analysts at Scotiabank explained that OIS is pricing roughly 20bpts of tightening for the October BoC meeting and slightly more than one full 25bpt hike by December. 

Key Quotes:

"The 2Y U.S.-Canada spread is showing signs of stabilization."

"Measures of sentiment are steady and pricing a relatively small premium for protection against CAD weakness and speculative CAD positioning appears to be shifting with Friday’s CFTC data showing a third consecutive week of short covering."

"Near-term domestic risk lies with this week’s housing releases and Friday’s employment data."

"USD/CAD short-term technicals: neutral-bearish."

"Momentum indicators are bearish however their magnitude remains muted."

"DMI’s are confirming the bearish trend and USD/CAD is threatening a break of its 100 day MA (1.2961) for the first time since mid-April."

"We look to near-term support at 1.2950 and 1.2920. Near-term resistance is expected above 1.3020."