USD/CAD to extend its losses toward the 1.2450 area – Scotiabank

USD/CAD trimmed nine consecutive days of losses. However, economists at Scotiabank still expect the pair to move downward.

Rallies towards the high 1.25/low 1.26 zone remain an attractive selling opportunity

“Given that the TSX has been one of the best performing major equity markets so far this year, month and quarter-end rebalancing flows may weigh on the CAD in the short run, delaying a run down through 1.2450. As yesterday’s CAD sell-off and today’s rebound reflect, however, USD rallies towards the high 1.25/low 1.26 zone remain an attractive selling opportunity.”

“A heavy tone persists on the short-term chart and trend momentum, while choppy, suggests the USD bear trend remains quite strong.”

“We see support at 1.2465, ahead of the Jan low at 1.2450, then 1.23.”

“Resistance remains 1.2585/1.2615 on the charts.”