USD/CAD to retest early December low in the upper 1.34s on a break below 1.3550 – Scotiabank

USD/CAD is marking time trading around the 1.36 point. Economists at Scotiabank analyze the pair’s outlook.

Risks are tilted to the downside

Spot losses Friday reversed sharply from the intraday low around 1.3550 which likely sets the near-term range base for the USD. 

Short-term trading patterns suggest better USD selling interest above the 1.36 area, however, with firmer resistance around 1.3625. 

Trend momentum has slipped into neutral on the short-term chart but still leans bearish on the longer-run oscillator, suggesting risks are tilted to the downside overall. 

A break below 1.3550 may see the USD weaken back to retest the early December low in the upper 1.34s.