USD/CAD remains bullish near term – Scotiabank

FX Strategist at Scotiabank Eric Theoret have reiterated the pair’s perspective remains tilted to the bullish side.

Key Quotes

“CAD drivers are mixed as widening (CAD-negative) yield spreads are offset by the continued rally in oil prices. Measures of sentiment are steady and risk reversals suggest no major change in the premium for protection against CAD weakness”.

“Friday’s CFTC data detailed a decisive turn in positioning with a decline in gross CAD longs and build in gross CAD shorts. The moderation in the modestly bullish $1.4bn net long was the first since late June, following five week run of short covering”.

“USDCAD is climbing within the gently rising trend channel from early June. Trend and momentum indicators are modestly bullish, and we look to near-term support around 1.3120 with potential resistance at 1.3200 and 1.3250. We look to medium-term gains toward 1.33 and 1.35”.