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Analysts at Citibank see the USD/CAD pair moving to the downside over the next months. The see the pair around 1.29 in a three-month perspective and at 1.25 in a six to twelve-month horizon. 

Key Quotes:

“The Loonie has benefitted greatly from decreasing global uncertainty, as it trades high beta to risk-on; we expect this momentum to continue through 2021 and correspondingly a lower USD to be an important positive CAD driver. Besides, The Canadian government continues to support the economy. On the central bank front, the BoC has already paused some of their easing measures, which may also support CAD.”

“USDCAD hovers around 1.3000 with major support seen between 1.2952/1.3000. Should the unit break through this support area, momentum is likely to rapidly build towards sharper declines targeting 1.2700 – 1.2800.”