USD/CAD to move downward in the coming weeks – Scotiabank

USD/CAD has tested the 1.26 area. Fundamental case for CAD strength is clear, therefore, economists at Scotiabank expect the USD/CAD to edge lower in the coming weeks.

Seasonals on the cusp of improvement

“Seasonal trends reflect a typically soft Q1 performance for the CAD which turns more positive as we move into Q2/Q3. We expect limited scope for USD gains in the short run and look for more CAD improvement in the coming weeks.”

“The economy has started the year with a bang; our Scotia Economics colleagues’ GDPNowcast is tracking growth well above 5% for Q1 so far.”

“We spot resistance at 1.2650 intraday and look for firm resistance to cap USD gains today.”

“Key USD support remains 1.2575/85.”