USD/CAD may test supportive level at 1.2783 and 1.2952 – CitiBank

The rising tensions between China and the US and investors‘ attention to the upcoming US presidential election may increase further downward pressure on USD and support the CAD, according to analysts at CitiBank. They continue to point out the loonie has catching up to do from a fundamental perspective, as WTI, and Canada’s Terms of Trader, have found a bottom. 

Key Quotes:

“We expect risk sentiment to be an important driver, but also think CAD has catching up to do from a fundamental perspective. WTI, and correspondingly Canada’s ToT, have found a bottom. We forecast a continued rebound here with WTI at 56$/bbl in 12m (3Q20). Additionally, economic surprises in Canada continue their positive trajectory. This may continue to support CAD.”

“USD/CAD may test supportive level at 1.2783 and 1.2952, with resistance at 1.3228.”