USD/CAD: Medium-term technical objective is 1.2980/90 – Scotiabank

USD/CAD holds in a narrow range in the low 1.32s. Economists at Scotiabank analyze the pair’s outlook.

Trend lower to persist

USD/CAD’s decline has reached its near-term potential defined by the 38.2% retracement support from the 2021/22 rally in the USD at 1.3220. Some consolidation from here would not surprise but the general trend remains USD-negative, trend momentum oscillators are bearish for the USD across a range of timeframes and the short-term pattern of trade (bear flag) suggests it would not take too much the get the ball rolling on the downside again. 

Minor support (and bear trigger) stands at 1.3205 today. 

Resistance is 1.3240 and 1.3275/80. 

The USD’s loss of support around 1.33 this week suggests the medium-term technical objective is 1.2980/90.