In opinion of Richard Franulovich, Strategist at Westpac, a test of the 1.3500 handle remains on the cards. Key Quotes “A multi-day low in USD/CAD surely cannot be far off, oscillators suggesting USD/CAD is the most oversold in eight years and specs trimming their CAD shorts to the lightest in nine months”. “That said, one must be open to one last gasp lower toward key support near 1.2855, on momentum alone. At these levels we would buy USD/CAD for a long term bounce back toward 1.35”. “China hard landing risk was always overstated but the pendulum may have swung too far in the complacent direction, ditto for Fed tightening expectations, especially in light of steadily improving US activity and inflation trends”. For more information, read our latest forex news.