FXStreet (Edinburgh) - Strategist at Westpac Richard Franulovich sees the outlook on the pair as bullish in the medium term, despite the current strength in CAD. Key Quotes “We push our long term bearish CAD view out into 2016 and adopt a constructive view for the week and month ahead”. “Even though CAD has risen strongly in recent days the appreciation understates the bounce in crude oil and short term yield spreads in its favour”. “The rally in energy prices suggest USD/CAD should be trading nearer 1.28 while the loss of yield support for the USD that has been playing out since the mid-Sep FOMC puts the CA-US 2yr bond spread at levels that justify USD/CAD nearer 1.26”. “The gravitational pull of yield spreads and energy prices could see USD/CAD trade more sustainably below 1.30 in coming weeks”. “However, we maintain a bullish medium term bias on USD/CAD. Another BoC rate cut seems likely in H1 2016”. “Questionable Chinese growth prospects are likely to keep Canada’s terms of trade suppressed deep into 2016. That, along with ongoing fiscal and household leverage headwinds suggest the risks to consensus expectations for 2% growth in 2016 are to the downside”. For more information, read our latest forex news.