FX Strategist at Scotiabank Eric Theoret noted the pair’s outlook remains neutral in the near term.
“The 2Y U.S.-Canada spread remains range bound and risk reversals are steady pricing a slight premium for protection against CAD weakness. This week’s NAFTA developments have not driven any meaningful movement in CAD. The recent move in CADMXN provides a clearer picture of market participants’ NAFTA-related concerns. We are neutral CAD as we await a sustained break of the month to date range”.
“Momentum signals are neutral and trend strength is weak as USDCAD continues to consolidate around its 50 day MA (1.2457). USDCAD has yet to deliver a sustained break of its October range roughly bound between the mid-lower 1.24 area and 1.2600. We look to near-term support at 1.2420 and resistance at 1.2520”.
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