USD/CAD keeps the bearish outlook – Scotiabank

FX Strategist at Scotiabank Eric Theoret noted the pair’s outlook remains tilted to the downside.

Key Quotes

“Oil prices and the 2Y U.S.-Canada yield spread are providing added support to CAD, the latter narrowing to a fresh two-month sub-15bpt low as of Wednesday’s close”.

“The market’s shift to an impressively pro-risk tone suggests an overwhelming bias toward pricing a ‘Remain’ outcome, however we continue to highlight the fundamental pieces that will linger beyond this week’s event risk—specifically, relative growth and the outlook for relative central bank policy”.

“USDCAD has decisively broken through anticipated support at 1.2750 and 1.2739 and is rapidly approaching the early June low around 1.2650. However, trend and momentum signals are relatively muted, and the ADX is remarkably trend-less with a sub-25 reading at 14”.