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FX Strategists at Scotiabank noted the pair’s short-term stance stays tilted towards the neutral side.

Key Quotes

“The outlook for relative central bank policy remains supportive as market participants consider Friday’s stronger than expected CPI data and its implications for the BoC. Domestic rate expectations are firming and yield spreads are narrowing in a CAD supportive manner. Headline risk is elevated as we look to BoC Sr. Dep. Gov. Wilkins’ panel participation on the topic of financial conditions and vulnerability (9:15am ET). Sentiment appears to be delivering additional CAD support as we note the softening in measures of implied volatility and stabilization in risk reversals. USDCAD is currently well above our FV estimate of 1.2922″.

“Momentum indicators are neutral and trend strength indicators are weak. Recent support has been observed around 1.3050 and recent USDCAD gains have faltered above 1.3150. We would anticipate additional near-term support at 1.3020, 1.3000 and the 100 day MA (1.2979)”.