USD/CAD remains neutral, limited resistance around 1.3150 – Scotiabank

According to FX Strategists at Scotiabank, the pair’s keep the neutral stance in the short-term horizon while facing resistance ahead of 1.3150.

Key Quotes

“Domestic rate expectations have softened modestly in response to the release of disappointing housing data and weakness in the price of Western Canada Select. Record crude price differentials are weighing on Canada’s terms of trade and lifting yield spreads in a CAD-negative manner as market participants reassess the outlook for relative central bank policy. Measures of sentiment are also signaling ongoing concern, with 1Y risk reversals hovering just below their recent 15 month highs”.

“USDCAD has yet to deliver a sustained break of either its 50 or 100 day MA’s. Momentum signals are close to neutral and trend strength indicators are weak. We await a break of either 1.3000 or 1.3080 and look to near-term support below 1.2950 and limited resistance ahead of 1.3150”.