USD/CAD needs to push on through 1.3585/1.3590 to see gains develop a little more – Scotiabank

USD/CAD is retesting the mid-February high at 1.3590. Economists at Scotiabank analyze the pair’s outlook.

Loonie likely to remain soft for now

The Canadian Dollar is likely to remain soft for now, with little fundamental incentive for the CAD to strengthen, given the recent widening in US/Canada interest rate differentials.

Solid gains on the day have reinvigorated short-term trend strength oscillators in the USD’s favour but the overall trend in spot through February remains flat and the USD will need to push on through 1.3585/1.3590 to see gains develop just a little more through to the low/mid 1.3600s. 

Support is 1.3540/1.3550.