USD/CAD remains bullish near-term – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, noted the pair’s outlook remains on the bullish side in the short term.

Key Quotes

“We remain CAD bears on the basis of relative central bank policy and continue to highlight the market’s unwarranted pricing of BoC tightening over the next 12 months. Recent CPI and GDP figures have disappointed and risk is elevated heading into Friday’s release of employment and trade data”.

“The 2Y U.S.-Canada yield spread remains wide, pushing back above 45bpts toward the extended levels from late December. We hold a Q2 CAD target of 0.71 (USDCAD at 1.40)”.

“USDCAD appears to be forming an impressive bullish hammer candle off the 100 day MA, delivering an impressive bullish outside reversal on both the two hour and four hour charts. Near-term resistance appears limited ahead of 1.34”.