USD/CAD: Scope for Loonie improvement is limited – Scotiabank
|CAD remains soft and may struggle to improve materially in the short run, economists at Scotiabank report.
USD/CAD may drop back to the mid-1.37s in the short run
Losses have edged below short-term trend support and may see spot drop back to the mid-1.37s in the short run but trend signals are USD-bullish and scope for USD/CAD losses appears limited at the moment.
Persistent USD gains through 1.37+ are starting to make a mark on ultra-long-term charts where the 1.37 point has been firm resistance on a monthly close basis. A high close for the USD through October would tilt risks towards a bit more strength in the near term at least but the broader set up – the USD is heavily overbought technically on the longer-term charts – does not clearly lend itself to a significant, further strengthening in the USD at this point. A high USD close on the month would warrant attention though.
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