USD/CAD could reach 1.28/1.29 in the next weeks – Scotiabank

In view of FX Strategists at Scotiabank, USD/CAD's upside momentum could extend to the 1.28/1.29 area in the next weeks.

Key Quotes

“The fact that the USD has turned decisively lower from retracement resistance (23.6% Fib of 1.38/1.24 move down at 1.2741) suggests some risk that the USD’s corrective gains are more or less fully played out”.

“Given the extent of the USD slide (and the absence of any real rebound) since May, we still rather think a USD recovery could extend to the 1.28/1.29 range in the next few weeks”.

“However, the odds of more, significant USD gains do look a little slimmer at the moment. Near-term, we look for 1.2650/1.2750 to contain the USD’s range and we have to lean a bearish on the outlook for near-term risks while 1.2750 caps”.