USD/CAD bearish with caution near term – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, noted the perspective on the pair stays bearish although with a cautious approach.

Key Quotes

“Momentum signals are bearish and trend indicators are confirming. We are somewhat cautious however, as we note the rise in the RSI, bouncing off the oversold threshold at 30”.

“The USDCAD candles are also potentially forming a bullish ‘morning star’ reversal”.

“The reversal would be confirmed on a close above the mid-point (1.3282) of Tuesday’s bearish candle”.

“The level roughly coincides with the 38.2% Fibo retracement of the May 2016-May 2017 USDCAD rally, a level that may provide near-term congestion in the absence of further downside toward the 50% retracement at 1.3127”.