Strategists at Scotiabank remain neutral bearish on the pair in the short-term, allowing for a potential visit to the 1.2550/00 area.
“We remain CAD bulls and suspect that the restraining influence of relative central bank policy softens into the next MPR meeting in July. Narrowing interest rate differentials should deliver added support to CAD as we look to medium-term strength on the basis of improving terms of trade”.
“USDCAD appears set to push back below 1.2600 following a short-lived rally above 200 day MA (1.2622) resistance. Daily momentum indicators remain bearish and DMI’s are confirming. We look to weakness through 1.2580 toward the lower end of the recent range around 1.2550. Additional support is expected at 1.2500 and the mid-Feb low around 1.2450”.
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