USD/CAD stays neutral near term – Scotiabank

Eric Theoret, FX Strategist at Scotiabank, reiterated the pair’s outlook is expected to stay on the neutral side in the short term.

Key Quotes

“The near-term balance of risk appears neutral-positive, with steady drivers and a clear improvement in the broader tone as risk reversals fade the recent build in the premium for protection against CAD weakness”.

“USDCAD continues to consolidate around the mid-1.27 area representing the first major retracement (23.5% at 1.2739) of the May-July decline”.

“Momentum signals are neutral and trend indicators are muted. We await a break of either 1.2650 or 1.2780”.