USD/CAD faces resistance around 1.2600 – Scotiabank

The pair is expected to meet a strong up barrier at the 1.2600 handle, according to FX Strategists at Scotiabank.

Key Quotes

“The broader tone appears somewhat tentative and CAD remains vulnerable in an environment of elevated uncertainty, with a risk profile that tends to deliver violent—albeit short-lived—declines in periods of market volatility. Domestic risk is limited ahead of Thursday’s speech from BoC SDG Wilkins, titled ‘Innovation and Inclusive Growth’. The speech may offer an update on the BoC’s economic outlook, in line with communication plans outlined by Wilkins last November”.

“Momentum indicators have only just climbed into bullish territory however they are already showing signs of exhaustion. USDCAD has struggled to extend meaningfully above 1.2550 resistance and recent consolidation has centered around the 38.2% Fibo retracement of the December-January decline. Further resistance is expected around 1.2600. Near-term support is limited ahead of 1.2420”.