USD/CAD could drop further to 1.2865 – Scotiabank

FX Strategists at Scotiabanl believe spot could extend the downside to the 1.2865 level in the short-term horizon.

Key Quotes

“EURUSD printed at 1.17 for the first time since the start of the month earlier in European trade as shorts continue to cover and investors perhaps consider re-establishing EUR longs”.

“There was little Eurozone data of note this morning. Eurozone M3 money supply growth—barely a consideration these days—weakened surprisingly in Jul (4.0% versus 4.5% in Jun). Italian manufacturing and consumer confidence readings weakened in Aug, however, perhaps reflecting recent domestic uncertainties”.

“Short-term trend dynamics look positive for the EUR still, with gains have developed since the middle of Aug well-supported by trend support (1.1624) and bullish trend momentum on the 1–, 6-hour and daily charts. Price signals are constructive on the weekly charts. This suggests a good chance that EUR gains can extend towards the 1.1790/00 area (Jul range highs) in the near-term at least”.