USD/CAD bearish momentum picks up pace – Scotiabank

According to Eric Theoret, FX Strategist at Scotiabank, the pair remains poised to extend its decline in the near-term.

Key Quotes

“We maintain a medium-term bearish CAD bias on the basis of relative policy, and note CAD’s recent divergence from levels implied by yield spreads —underscoring the near-term dominance of oil over the past two sessions”.

“Momentum is bearish and the RSI is falling toward the oversold threshold at 30”.

“The 9 day MA has crossed below the 21 day MA, and DMI’s have shifted decisively bearish”.

“The USDCAD decline has broken below the 61.8% Fibo retracement level

(1.2739) of the May rally, increasing the risk of a full retracement to the May 3 low at 1.2461. Support is limited ahead of 1.26. Near-term resistance is expected at 1.2780”.