USD/CAD is on the cusp of testing the 1.38 level. Economists at Scotiabank analyze the pair’s outlook.

Trend higher remains well-supported by bullish trend momentum signals

While the USD trend higher remains well-supported by bullish trend momentum signals, these oscillators also reflect a degree of stretch in the USD’s latest move up. 

The 1-hour and 6-hour RSI measures are also showing clear signs of diverging with higher spot levels which can be a warning sign of a correction. But there is not much else to suggest the USD cannot push on to retest 1.3860 – the March high – in the short run.