The CAD is marginally firmer against the USD on the day but remains confined to a now familiar trading range above 1.33. Economists at Scotiabank analyze USD/CAD outlook.

Limited scope for counter-trend corrections

The positive risk backdrop suggests USD/CAD could take another run at the low 1.33 zone if US data reports comply. But, after snapping higher yesterday – the first net gain in the USD in nine sessions – pressure for some additional consolidation in USD/CAD may be building absent clear, additional CAD gains soon.

Underlying trend dynamics continue to lean USD-bearish, with DMI oscillators aligned negatively for the USD across intraday, daily and weekly studies. This situation typically implies limited scope for counter-trend corrections and ongoing downside pressure on the USD. 

Spot’s extended hesitation above the key 1.33 support zone risks driving some modest gains in the USD in the short run at least, however.