USD/CAD keeps the bullish outlook – Scotiabank

FX Strategist at Scotiabank Eric Theoret has noted that a re-test of the 1.33-1.35 levels remains on the cards for USD/CAD in the near-term.

Key Quotes

“CAD remains completely disconnected from the 2Y U.S.-Canada yield spread and continues to trade in tandem with oil prices. Risk reversals are stable, having consolidated for over a week, thus limiting the potential for CAD support on the back of a continued moderation in bearish sentiment”.

“Momentum signals are neutral-bullish, short-term MA’s are bullishly aligned with the 9 day MA trading above the 21 day MA, and medium-term upside is set to be confirmed with the imminent crossing of the 50 day MA above the 100 day MA”.

“USDCAD is once again testing the upper bound of the triangular consolidation from early May, and we continue to look for gains toward 1.33 and 1.35”.