USD/CAD: Downside potential to the 1.2940 area in the short run – Scotiabank

USD/CAD continues losing ground for the fourth straight day. In the view of economists at Scotiabank, the Canadian dollar can extend gains to the low 1.29s against the US dollar.

Technical picture remains CAD-positive

“CAD gains on the USD have lagged somewhat but the technical picture remains CAD-positive following last week’s second rejection of the low 1.32 area and the USD’s break under the double top neckline at 1.3075.”

“USD/CAD dips have been reluctant to extend through the upper 1.29s again today, similar to Friday, but the double top pattern implies downside potential to the 1.2940 area in the short run.”