USD/CAD keeps the bullish outlook near term – Scotiabank

FX Strategist at Scotiabank Eric Theoret has noted the pair’s outlook remains on the bullish side in the near term.

Key Quotes

“We remain bearish CAD into year-end, looking to continued weakness on the back of relative central bank policy and the divergence between a tentatively hawkish Fed and an increasingly unreliable tone from a nominally neutral BoC”.

“Oil prices are likely to provide added pressure on CAD as we consider the month-long turn in WTI and its struggles above $50/bbl in an environment of broad-based USD strength”.

“Signals are bullish across both trend and momentum indicators as USDCAD retraces the January-May decline. The 50 day MA appears poised to break above the 200 day MA (see middle chart) and we highlight the absence of major resistance ahead of the 50% retracement at 1.3575”.