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Analysts at Citibank forecast the USD/CAD pair will trade around 1.33 over 0-3M and at 1.31 in 6-12M.  

Key Quotes:

“Although the Fed Chair Powell’s speech was seen as diplomatically dovish but overwhelmed by US – China tensions The United States. The market volatility increase obviously and limit the performance of CAD.”

“Canada’s ex-auto sales jump 0.9% mom and consumer price index rose 0.5%, all beat expectation, and support CAD. However, the market still expect BoC would cut rate once in the rest of this year which may put pressure on CAD.”

“Trade war uncertainty had intensified and oil price declined. This may increase the downside risks to CAD. But Canada’s labor market remained strong which further supports the case for a neutral policy stance of BoC. The interest rate spread would favor CAD.”

“USD/CAD had tried to break 1.3340 level for several times since Aug 7 but failed. And the pair’s RSI dipped into the oversold territory. The upper side was limited and downside risk had risen.”