USD/CAD: Fade on Major Gains in USD - Scotiabank
Analysts at Scotiabank explained that USD/CAD’s test of 1.25 on Friday
is marked on the daily chart by a minor “doji” candle—ordinarily a
warning that a move is prone to a correction.
The recent trend
decline in USD/CAD is littered with other, minor warning signals that
have failed to herald any meaningful bounce, however, and we are loathe
to call an end to the drop in funds at this point.
USD/CAD is
entering its sixth successive week of declines but short, medium and
longer-term trend strength signals remain bearishly aligned, suggesting
the move lower retains very strong, underlying momentum where rebounds
will be severely limited.
We continue to see minor gains in the
USD as a selling opportunity. We see resistance at 1.2580/00 over the
next 24 hours, stronger resistance at 1.2750. We think a reversal
through 1.30 is needed to boost the USD significantly."
