USD/CAD: Upside potential is limited, gains may not exceed key resistance at 1.3315/25 – Scotiabank

CAD lost ground against a generally stronger USD last week but losses were duly limited to around 0.4% on the week, a little worse than most of its G10 peers. Economists at Scotiabank analyze USD/CAD outlook.

CAD downside limited

Fundamental risks appear neutral to mildly positive for the CAD. 

Our week-ahead model anticipates a 1.3170/1.3430 range for USD/CAD. 

Technical pointers correctly highlighted upside risks for the USD last week but signals are now more nuanced in terms of guidance for the week ahead. Trends still rather suggest to me that upside potential in the USD is limited and gains may not exceed key resistance at 1.3315/25. An overshoot, given positive weekly price action, is hard to rule out, however. 

Support is 1.3200/10, with USD losses below here liable to extend back to 1.3150/75 quickly.