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USD/CAD: Limited room for short-term gains – Scotiabank

The Canadian dollar is falling a little today. The economists of Scotiabank analyze the outlook for the USD/CAD pair.

The reduction in spreads favors the CAD.

Weak stocks and crude oil are minor constraints on the CAD in the near term, but some improvement in short-term yield spreads in favor of the CAD this week rather suggests room for a little more strength.

The session’s modest gains so far are moving the USD away from key support (trend and possible trigger for the bearish shoulder-head-shoulder pattern) at 1.3655.

USD gains through 1.3705/1.3710 could modestly extend to 1.3750, although short-term trend oscillators are starting to line up lower for USD, which should really limit the scope for near-term gains.

Source: Fx Street

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