USD/CAD: Sustained move below 1.2450 to open up the 1.23 level – Scotiabank

USD/CAD has fallen to the mid 1.24s. Strategists at Scotiabank expect the pair to tank towards the 1.23 level on a break below the 1.24 region.

Loonie strengthens with strong crude oil  

“From a technical perspective, the cross may struggle to detach itself from the 1.2450-1.2500 zone but a convincing decline opens up USD losses to the 1.24 mark with 1.23 following with relative ease.”

“The loonie will have to resist Fed tapering bets ahead of its November meeting and 2022 hike calls will likely act as a tailwind for the dollar through year-end. On the other hand, there’s no quick solution in sight for the global energy crunch that should keep the CAD supported by stronger crude prices.”