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1 Apr 2014
USD/CAD suffering losses, but broadly bullish - TDS
FXStreet (Guatemala) - Shaun Osbourne, Chief FX Strategist at TD Securities noted the performance of the Canadian dollar but overall remains broadly bullish on USD/CAD.
Key Quotes
"Slightly better than expected Canadian GDP data Monday failed to provide the CAD with much more lift. The 1.10 area remains very firm support for USDCAD currently and although the market failed to move significantly higher yesterday, we still think the late March liquidation trade lower in USD/CAD is more or less complete."
"There are no major Canadian data releases today but firm US ISM data may help support the USD intraday. Key data over the remainder of the week—especially Friday’s Canada/US jobs reports—will be the more influential data for funds."
"We suspect that investors will be reluctant to take a stronger view on the direction of USD/CAD until we get that information Note that the market consensus for US NFP’s has firmed modestly over the past day or so (now +200k) while the consensus for Canadian employment gains has eased slightly to +22.5k (from +25k Friday). The recent trend in Canadian job growth does appear to be relatively disappointing compared to that of the US in our view."
"The flushing out of short CAD positions reflected in last Friday’s IMM data and the lack of movement seen so far this week suggest that market positioning is more neutral now and that investors are ready to jump on a push below 1.10 or back through the high 1.10/low1.11 zone."
"From a technical point of view, USD/CAD is trying to base, we feel. The USD traded well off the intraday low yesterday and while it still closed net lower on the day, the rebound from the low 1.10 zone looks quite emphatic (a “hammer” low on the daily candle chart)."
"We remain broadly bullish on the outlook for USD/CAD and think USD longs—or those looking to establish longs—should feel more comfortable with the USD’s ability to hold above 1.10 despite the weight of selling pressures over the last couple of sessions. We look for gains through 1.1065/75 to trigger a little more upside lift in USD/CAD towards the low/mid 1.11s intraday."
Key Quotes
"Slightly better than expected Canadian GDP data Monday failed to provide the CAD with much more lift. The 1.10 area remains very firm support for USDCAD currently and although the market failed to move significantly higher yesterday, we still think the late March liquidation trade lower in USD/CAD is more or less complete."
"There are no major Canadian data releases today but firm US ISM data may help support the USD intraday. Key data over the remainder of the week—especially Friday’s Canada/US jobs reports—will be the more influential data for funds."
"We suspect that investors will be reluctant to take a stronger view on the direction of USD/CAD until we get that information Note that the market consensus for US NFP’s has firmed modestly over the past day or so (now +200k) while the consensus for Canadian employment gains has eased slightly to +22.5k (from +25k Friday). The recent trend in Canadian job growth does appear to be relatively disappointing compared to that of the US in our view."
"The flushing out of short CAD positions reflected in last Friday’s IMM data and the lack of movement seen so far this week suggest that market positioning is more neutral now and that investors are ready to jump on a push below 1.10 or back through the high 1.10/low1.11 zone."
"From a technical point of view, USD/CAD is trying to base, we feel. The USD traded well off the intraday low yesterday and while it still closed net lower on the day, the rebound from the low 1.10 zone looks quite emphatic (a “hammer” low on the daily candle chart)."
"We remain broadly bullish on the outlook for USD/CAD and think USD longs—or those looking to establish longs—should feel more comfortable with the USD’s ability to hold above 1.10 despite the weight of selling pressures over the last couple of sessions. We look for gains through 1.1065/75 to trigger a little more upside lift in USD/CAD towards the low/mid 1.11s intraday."