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Bullish stance persists around USD/CAD – Scotiabank

FXStreet (Edinburgh) - In the view of Eric Theoret, Currency Strategist at Scotiabank, the perspective for the pair remains bullish.

Key Quotes

“Measures of CAD volatility are climbing and options prices hint to a rise in demand for downside protection, with an ongoing divergence to its key drivers (oil, relative central bank policy expectations) highlighting a considerable influence from flows driven by sentiment and positioning”.

“Near-term CAD risk lies with the broader market tone ahead of Wednesday’s monthly GDP for July”.

“Momentum indicators are suggestive of acceleration, with the MACD joining an increasingly bullish RSI at 65”.

“We remain concerned by the lack of confirmation from momentum, with signs of negative divergence as both the MACD and RSI fail to confirm fresh highs in spot”.

USDCAD is quickly approaching 1.3467, the 61.8% Fibonacci retracement level of the 2002-2007 decline from 1.6193 to 0.9058”.

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