USD/CAD bullish, targets 1.40 in Q2 – Scotiabank

FX Strategist Eric Theoret at Scotiabank noted the pair’s bullish outlook, adding that the next target could come at 1.40 in Q2.

Key Quotes

“We maintain a bearish CAD outlook (bullish USDCAD, targeting 1.40 for end Q2) and note the considerable vulnerability to sentiment and positioning given remarkably low levels of implied CAD volatility and extended (multi-year highs in) bullish CAD CFTC positions”.

“USDCAD has cleared Friday’s high with a push toward 1.3450 hitting levels last seen in early January. The technical picture is broadly bullish with and RSI at 70, bullish DMI’s, and an ADX that appears set to push into trend-confirming territory above 25. We note the absence of significant resistance ahead of 1.36 and look to near-term support at 1.3380”.