The pair’s outlook stays bearish in the short-term horizon and should meet resistance in the 1.2780 region, according to FX Strategists at Scotiabank.

“Domestic rate expectations are firming as market participants consider the continued improvement in Canada’s terms of trade with broad strength across a range of commodities. U.S. officials appear intent on completing the NAFTA renegotiation by the end of next week, and we suspect that the CAD has not yet fully priced a successful conclusion. The outcome will also carry considerable implications for the BoC, given the negative forecast adjustments that were incorporated in the April MPR. Rate expectations for the May 30 BoC meeting appear relatively light with OIS pricing only 8bpts of tightening”.

“Trend and momentum indicators have turned and USDCAD’s weekly chart is showing a bearish outside range at the end of a three candle ‘evening star’. We highlight the significance of the 200 week MA at 1.2753 and note the absence of near-term support ahead of 1.2680. Resistance is expected above 1.2780”.