USD/CAD bearish near term – Scotiabank

FX Strategist at Scotiabank Eric Theoret has reiterated the bearish stance on the pair in the short term.

Key Quotes

“We note broad-based USD weakness against all of the G10 currencies and continue to highlight the dominance of the broader market tone. Both oil prices and the outlook for relative central bank policy are providing for continued CAD strength as WTI flirts with fresh highs above $46/bbl and as market participants fade easing expectations for the BoC”.

“OIS have roughly halved the probability of a rate cut over the next 12 months, softening it from 30% to 15% over the past week”.

“USDCAD has made a decisive break below 1.29 support with a decline to the low 1.28s. We look to further weakness toward the June 24 open at 1.2750 followed by the June 23 low near 1.2680. Momentum signals are bearish and the RSI remains well above the oversold threshold at 30. Short-term MA’s are bearishly aligned and DMI’s are providing confirmation. Resistance is limited ahead of 1.2920”.