USD/CAD forecast to rise modestly over the next months - Rabobank

The Canadian dollar was among the top performers of the week. According to forecasts from Rabobank, USD/CAD is likely to rise modestly in the coming months. They see the pair at 1.27 in 3M, 1.28 in 6M and at 1.30 in 12M. 

Key Quotes: 

“USD/CAD touched a low of 1.2251 at the end of January before trending up to a high of 1.3125. The downtrend from there formed a textbook head and shoulders pattern and the break of the neckline at 1.28 targeted a move down to 1.25.”

“The combination of weakening domestic data, a pause in tightening and a more bullish outlook for USD all pose upside risks for USD/CAD.”

“In terms of downside risks for USD/CAD, if we see a renegotiated NAFTA then this will provide support for CAD. Furthermore, although not our base case, if oil prices continue to rally then this will help boost demand for CAD.”