USD/CAD: At the risk of extended losses back towards 1.32/1.33 in the next couple of weeks – Scotiabank
The CAD is riding the soft USD wave back to its best levels since the end of September and might have a bit more to go yet, economists at Scotiabank report.
Scope for rebounds is looking increasingly constrained
Spot losses below 1.3490/1.3495 tilt technical risks more strongly to the downside in the near-to-medium term.
New short-term cycle lows for the USD plus a stronger alignment of bearish trend oscillators and longer-term bear reversal signals for the USD which developed through November all imply ongoing downward pressure on the USD towards 1.3400 (61.8% retracement of the H2 rally in the USD) at least in the near-term.
Broader USD weakness is lifting the risk of extended losses back towards 1.32/1.33 in the next couple of weeks.
Scope for USD rebounds is looking increasingly constrained; recoveries are liable to stall in the 1.35 zone now.
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