USD/CAD could drop and test 1.2850 – Scotiabank

FX Strategists at UOB Group noted the pair keeps the neutral tone in the near term, although it could slip back to the mid-1.2800s.

Key Quotes

“Momentum signals are neutral, DMI’s are muted, and the ADX trend strength indicator is weak”.

“USDCAD has struggled to extend its recent rallies above the 1.3020 level and consistent resistance has been observed around levels roughly corresponding to the descending trend line drawn from the 2016-2017 highs”.

“The 1.2950-1.2920 gap is critical. A break could see USDCAD quickly extend toward 1.2850”.