USDCAD to fade rallies as technical patterns remain negative – Scotiabank

The Canadian Dollar weakens on soft risk appetite. However, the technical picture suggests risks for the USDCAD pair are tilted to the downside, economists at Scotiabank

Negative technical factors

“USDCAD sentiment remains heavily influenced by choppy risk sentiment but our fair value estimate for spot currently (1.3389) suggests that the market is about where it should be, all things (equities, volatility, spreads, commodities) considered.”

“USDCAD has effectively triggered a minor double bottom at 1.3230 on the move above 1.3330 which paves the way for a further squeeze up to the 1.3430 into the end of the week. Broader patterns remain negative for the USD (the daily Head and Shoulders formation remains in play), however, and we still favour looking to fade USD rallies.”