USD/CAD: Push above 1.3550 likely to drive additional gains to 1.3625 – Scotiabank

USD/CAD is trading close to Monday’s high and near key technical resistance around the mid-1.3500s. Economists at Scotiabank analyze the pair’s outlook.

Pressure on the mid-1.3500s will persist for now

Spot gains stalled around the January highs and Fibonacci retracement resistance at 1.3540 on Monday and the USD’s advance has remained close to, but below, that point today. 

Resistance is being bolstered by the 100-DMA (1.3553) on the daily chart. 

The USD’s firm underlying trend suggests pressure on the mid-1.3500s will persist for now, with a push above 1.3550 likely to drive additional USD gains to 1.3625 (61.8% retracement of the USD’s Q4 drop).

Key support is 1.3500/1.3505 in the very short run. USD losses back through here should see the USD trade back to 1.3455/1.3465.