USD/CAD may nudge a little higher in the short run – Scotiabank

USD/CAD has steadied below 1.3500. Economists at Scotiabank analyze the pair’s outlook.

Potential bull flag pattern

The domestic data run is relatively light this week – just Manufacturing Sales, Housing Starts and Wholesale Sales, which are all out later in the week. This likely means the CAD will trade more off of external developments – the USD, asset markets – and technical factors in the next day or so.

Spot’s losses last week stalled in the low 1.3400s and price action leaves the door open for a little more corrective USD strength in the short run, potentially. 

USD gains are consolidating just under 1.3500 in what could be a bull flag pattern (more gains above 1.3495/1.3500 intraday towards firmer resistance at 1.3540/1.3550.

USD support is 1.3420/1.3440.