USD/CAD: Losses may extend to the 1.27/1.28 range in the next three months or so – Scotiabank

The CAD got a lift last week. Shaun Osborne, Chief FX Strategist at Scotiabank, analyzes USD/CAD outlook.

CAD’s grind higher should extend

We continue to forecast 1.30 for USD/CAD at year-end but feel losses may extend to the 1.27/1.28 range in the next three months or so. 

New cycle lows and solidly bearish trend momentum indicate ongoing downside risks for the USD and limited scope for counter-trend corrections.

I expect firm resistance to USD gains now at 1.3345/50 (former trend support, now resistance). The USD may even struggle to recover much beyond 1.3200. 

Support and near-term downside objective is 1.2990 (50% Fibonacci retracement of the 2021/22 USD rally).