FXStreet (Edinburgh) – According to Eric Theoret, Currency Strategist at Scotiabank, the near term outlook on the pair remains tilted to the downside.
Key Quotes
“Relative policy and oil are both driving CAD strength, as yield spreads and the broader USD adjust to a softened, gradual normalization path for the Fed”.
“The shifting U.S. outlook is overshadowing—while simultaneously weighing on—domestic policy considerations, with OIS having deteriorated over the past week and currently pricing in a 24% chance of a cut over the next 12 months”.
“A break of recent support near 1.2200 and acceleration in bearish momentum indicators hints to further decline”.
“A break of the 61.8% Fibo retracement level (1.2166) of the late-May USDCAD rally has increased the risk of a full retracement to the recent 1.1920 low. Failure to sustain gains and close below 1.2166 would shift the balance of risk”.
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