USD/CAD seen supported around 1.3000/1.2980 – Scotiabank

According to FX Strategists at Scotiabank, the pair should meet support in the 1.3000/1.2980 band in the near term horizon.

Key Quotes

“The outlook for relative central bank policy remains supportive and domestic rate expectations have firmed in the aftermath of last week’s CPI. Yield spreads are heavy and testing fresh lows, and sentiment is delivering added support as we note the broad moderation in measures of implied CAD volatility across a range of time horizons. Our current FV estimate for USDCAD is 1.2870”.

“Trend and momentum indicators are modestly bearish as USDCAD drifts to the lower end of its one month range roughly bound between the mid-1.29s and upper-1.31s. The 1.3050 support level has been broken and USDCAD is now threatening an extension through 1.3020. We would anticipate additional support at the psychologically important 1.3000 level followed by the 100 day MA at 1.2981. Near-term resistance is now expected above 1.3080”.