USD/CAD bullish short-term – Scotiabank

FX Strategist at Scotiabank Eric Theoret has reiterated the bullish bias on the pair in the near-term.

Key Quotes

“In terms of drivers, CAD continues to trade in tandem with oil prices in a manner that underscores the importance of the broader tone. The divergence to short-term yield spreads (a proxy for relative central bank policy) has been notable, and we highlight the potential for CAD weakness on the basis of a renewed widening in the 2Y U.S.-Canada yield spread”.

“USDCAD is consolidating around its 50 day MA (1.2861) following a marginal short-lived test of a fresh one week high. We maintain a bullish bias and look to gains above 1.29 with medium-term risk toward 1.33 and 1.35. Momentum signals are remarkably muted and the ADX is trendless under 25”.