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- USD/CAD is overbought but a stronger move lower is needed to signal increased downside risks – Scotiabank
USD/CAD is overbought but a stronger move lower is needed to signal increased downside risks – Scotiabank
USD/CAD saw a strong rejection of the 1.36 area on Wednesday. Economists at Scotiabank analyze the pair’s outlook.
Underlying dynamics remain USD-bullish on the trend oscillators
Spot’s reaction to Wedneday’s test of the 1.36 area (effectively a retest of trend support-turned-resistance) looks USD-negative on the face of it, with the intraday chart reflecting a big, bearish ‘shooting star’ candle on the six-hour chart. But the USD is grinding a little higher again so far today and underlying dynamics remain USD-bullish on the trend oscillators.
The USD is overbought but a stronger move lower is needed to signal increased downside risks at this point.
Resistance is 1.3555/1.3565 and 1.3600/1.3610. Support is 1.3495/1.3505.
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