Usdcad Will Strengthen Scotiabank

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Usdcad Will Strengthen Scotiabank

Usd/Cad Will Strengthen On Break Above 1.3720 - Scotiabank

The USD/CAD pair shows that the Canadian Dollar (CAD) is on the back foot while the US Dollar (USD) is gaining ground. Given the current price action of the USD/CAD, Scotiabank's analysts have cited that the nearest resistance is around 1.3750 - 1.3755.

For the day, the gains in the USD are marginal, but it seems that the USD/CAD will likely close in the green for the first time in a really long time. In the short term, there's a high chance that the USD/CAD will try to challenge the July high near the 1.3750.

Canadian Retail Sales To Decline By 0.5%

On the fundamental side, the upcoming retail sales data from Canada will be closely watched. According to the market players, retail sales (in Canada) will decline by 0.6% during May 2024, similar to the data from April 2024.

Similarly, ex-auto sales is also expected to decline by 0.5% during the month. Scotiabank analysts believe that the weaker data from Canada will not be a surprise to anyone. However, it will reaffirm the market's expectations of a rate cut from the Bank of Canada (BoC) during the next meeting.

Right now, the forecast regarding the rate cuts is mostly mixed, while most of the players expect the BoC to maintain the current rates. However, consistently weak data from Canada could force the BoC's hand into lowering the policy rate.

For now, USD/CAD is holding its ground near 1.3720, with the next resistance at 1.3750. As for the intraday support of USD/CAD, the first one is seen around 1.3690, while the second support is around 1.3780.

Right now, the Canadian Dollar is weaker than the US Dollar, which means an upside for the USD/CAD. On the D1 timeframe of USD/CAD, the trend is bullish while the momentum indicators are printing in the neutral area. Similarly, the volatility appears to be shrinking as well.

Despite the bullish trend, experts are forecasting a bearish move in the USD/CAD and expect the pair to drop to 1.3578 in the next few days.

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