Scotiabank Sees CAD Strength Against USD to Reach 1.35

According to Scotiabank's foreign exchange strategists, the Canadian dollar is poised for strength against the US dollar. The bank notes a bullish structure for the CAD, with the potential to reach the 1.35 handle in the near term.

This constructive technical outlook suggests further downside for USD/CAD as long as it remains below key resistance levels. Scotiabank's analysts identify a bullish setup for the Canadian dollar, which is based on the pair's failure to sustain upward momentum and the formation of lower highs on the daily chart.

The bank emphasizes that as long as USD/CAD stays below the 1.3650-1.3700 zone, the path of least resistance is lower. The 1.35 area acts as the next major support level, making it a crucial psychological and technical milestone for traders and investors.