USDCAD retains a heavy overall feel - Scotiabank

USDCAD retains a heavy overall feel as  the decline has accelerated over the past month and while some oscillator signals suggest the USD move lower is “oversold”, it is important to note that there is no sign that the rally is slowing at this point—or even close to reversing, explains the analysis team at Scotiabank. 

Key Quotes

“Price action over the past couple of weeks has been characterized by sell-offs, followed by minor consolidations ahead of another push lower.  This seems to be a pattern that is repeating itself at the start of this week.  We think the two key features to focus on for USDCAD are 1) successively lower lows and lower highs being carved out on the charts stress the bearish trend in place and 2) the broader alignment of trend strength oscillators across short, medium and long-term studies which typically means ongoing directional pressure and limited counter -trend corrections.  We favour selling minor USD rallies to the 1.27 area and note no support below 1.2630 until 1.2460 (Jan ‘16 low).”