USD/CAD points upwards short term – Scotiabank

FX Strategist at Scotiabank Eric Theoret noted the bullish perspective for the pair in the near run.

Key Quotes

“CAD appears somewhat constrained by the divergence in its drivers, with a notable narrowing in the U.S.-Canada 2Y yield spread (CAD supportive) and a continued decline in oil prices (CAD negative)”.

“Risk reversals show a continued rise in the premium for protection against CAD weakness across a range of time frames”.

“USDCAD has tested a fresh five session high around 1.2800 and appears set to make further gains to ward its 50 day MA at 1.2870. Most signals are weak (muted momentum, trend-less ADX). We look to near-term support at 1.2720 and highlight the absence of significant resistance between 1.2820 and 1.2950”.