USDCAD: Rally continues - Scotiabank
Research Team at Scotiabank, notes that the USDCAD continues to rally from Friday’s fresh multi-month low, testing near term resistance around 1.3400 at the upper bound of the descending wedge formation off the January highs.
Key Quotes
“Descending wedges are typically resolved with a reversal, suggesting upside risk on a sustained break of 1.3400. We note that Friday’s lows also respected longer-term support off the Sept 2014-May 2015 trend line, providing for near term support at 1.3250. Bearish momentum is fading and the RSI is now at 42, well off its March 7 oversold low under 28.
EURCAD has risen back toward the upper end of its recent range, climbing above the 61.8% Fibo around 1.4800. We continue to highlight the potential for near-term gains before a resumption of the Jan-March decline, with risk of a rally toward the 50% and 38.2% retracement levels of the Dec-Jan rally. Bearish momentum has faded and trend signals hint
to a shift in the balance of risk. Gains would be confirmed on a break of the 21 day MA.”
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