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10 Feb 2014
Flash: USD/CAD bullish - TD Securities
FXStreet (Guatemala) - Shaun Osbourne, Chief FX Strategist at TD Securities noted key positioning in the USD/CAD in fundamentals and technical levels.
Key Quotes:
"The combination of weaker than expected US NFP data and the better than (even our) forecast Canadian jobs data put the long USD/CAD trade under a little more pressure Friday. We are not that surprised. The pressure for a deeper correction to the sharp USD/CAD rally seen in the past few weeks seems to have been building after the drop back from levels above1.12."
"From here, there is something of a vacuum in terms of domestic data releases—the important ones that is. CPI and retail sales are out on the 21st February and GDP on the 28th. There is a two or three-week window for the CAD to improve before we get a reminder of why the currency has been under so much pressure in the past couple of months in other words."
"Technically, we think the loss of support in the low 1.10 area last week sets USD/CAD up for further corrective losses. There has barely been any sort of correction at all to speak of since late September and while we think the medium-term trend remains firmly higher, short-term risks are geared to the downside."
"USD/CAD rebounded from retracement support in the high 1.09s last week but gains have struggled to extend significantly and we think last week’s firm support zone (USD/CAD 1.1040/45) should provide resistance to a deeper USD recovery. The short-term risk still appears to be geared towards more corrective CAD gains at the moment."
"We spot intraday resistance at 1.1070 (neutral above here). Only new cycle highs (or cheaper levels to buy nearer 1.09) will get us bullish USD/CAD from here at the moment."
Key Quotes:
"The combination of weaker than expected US NFP data and the better than (even our) forecast Canadian jobs data put the long USD/CAD trade under a little more pressure Friday. We are not that surprised. The pressure for a deeper correction to the sharp USD/CAD rally seen in the past few weeks seems to have been building after the drop back from levels above1.12."
"From here, there is something of a vacuum in terms of domestic data releases—the important ones that is. CPI and retail sales are out on the 21st February and GDP on the 28th. There is a two or three-week window for the CAD to improve before we get a reminder of why the currency has been under so much pressure in the past couple of months in other words."
"Technically, we think the loss of support in the low 1.10 area last week sets USD/CAD up for further corrective losses. There has barely been any sort of correction at all to speak of since late September and while we think the medium-term trend remains firmly higher, short-term risks are geared to the downside."
"USD/CAD rebounded from retracement support in the high 1.09s last week but gains have struggled to extend significantly and we think last week’s firm support zone (USD/CAD 1.1040/45) should provide resistance to a deeper USD recovery. The short-term risk still appears to be geared towards more corrective CAD gains at the moment."
"We spot intraday resistance at 1.1070 (neutral above here). Only new cycle highs (or cheaper levels to buy nearer 1.09) will get us bullish USD/CAD from here at the moment."