USD/CAD bullish, resistance lies at 1.3312 – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, sees the pair’s outlook on the bullish side although resistance appears just above the 1.3300 area.

Key Quotes

“USDCAD has cleared the 200 day MA and the late September highs around 1.3280, rallying toward 1.33 to levels last seen in mid-March (see bottom chart). A consideration of the January-April decline and its major retracement levels would suggest potential resistance at 1.3312 (38.2% Fibo) followed by the 50% retracement at 1.3575. Momentum signals are bullish and the RSI remains relatively muted at 62, leaving ample space for further upside ahead of the overbought threshold at 70”.

“We look to a continued widening in the spread delivering further weakness for CAD. A turn in oil would compound the pressure from relative central bank policy. CAD is vulnerable”.