USD/CAD to slide towards the 1.27 area – Scotiabank

USD/CAD is little changed on the session. Looking ahead, economists at Scotiabank expect the pair to tick down towards the low 1.27s.

More range trading in the short-run

“We look for the CAD to pick up a little more support in the short run if the data run continues to support the impression that the domestic economy is running ahead of BoC expectations, which will keep policymakers on a relatively aggressive tightening path in the next few months.”

“The underlying momentum signals on the shorter-term studies remain mixed, suggesting more range trading in the short run.”

“We still view broader risks as being tilted to the downside (low 1.27s at least), on the basis of bearish, longer term (weekly) price signals.”

“Intraday weakness below minor trend support at 1.2810 would suggest a run to 1.2765.”