USD/CAD’s price action remains in consolidation mode, with potentially USD-negative implications, economists at Scotiabank report.

Short-term resistance aligns around 1.3450

“A small, bear flag/triangle pattern may be developing – effectively a continuation pattern after the USD’s sharp fall last week.”

“Price action shows firm, short-term resistance around 1.3450, the top of the pattern.”

“Pressure on the low end of the range is developing and losses through 1.3410/20 should see the USD drift lower resume.”

“Trends across a range of variables have been more CAD-positive than not and the CAD is trading well below where our fair value model suggests fundamental equilibrium is – 1.3249. This should limit scope for USD gains.”