CAD/MXN: Losses could extend to the 12 area – Scotiabank

MXN continues to strengthen and extend gains through its recent range highs against the CAD. Economists at Scotiabank analyze CAD/MXN outlook.

Significant rally unlikely to develop

The cross has put some pressure on bear trend resistance in the past couple of weeks but there is little else from price action to suggest that a significant rally in the CAD is poised to develop. 

Daily and weekly DMI signals do highlight the stretched nature of the CAD sell-off here but the degree of ‘stretch’ is not that extreme (relative to recent cycles). 

Losses could, potentially, extend to the 12 area (range lows from 2010/15) now.