USD/CAD: In short term may trade between 1.3016 and 1.3340 – CitiBank

Analysts at Citibank forecast the USD/CAD pair will trade around 1.33 over 0-3M and at 1.31 in 6-12M. 

Key Quotes:

“Although the Fed Chair Powell’s speech was seen as diplomatically dovish but overwhelmed by US - China tensions The United States. The market volatility increase obviously and limit the performance of CAD.”

“Canada’s ex-auto sales jump 0.9% mom and consumer price index rose 0.5%, all beat expectation, and support CAD. However, the market still expect BoC would cut rate once in the rest of this year which may put pressure on CAD.”

“Trade war uncertainty had intensified and oil price declined. This may increase the downside risks to CAD. But Canada’s labor market remained strong which further supports the case for a neutral policy stance of BoC. The interest rate spread would favor CAD.”

“USD/CAD had tried to break 1.3340 level for several times since Aug 7 but failed. And the pair’s RSI dipped into the oversold territory. The upper side was limited and downside risk had risen.”