8 Apr 2015
USD/CAD trading heavy, FOMC risk ahead – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities, believe that CAD crosses are pressuring USD/CAD, and the FOMC minutes ahead risks further move lower for the pair.
Key Quotes
“USDCAD has been trading heavy in recent sessions with funds managing to break below the 1.24 level briefly earlier this morning.”
“We have been calling for a correction in funds in recent days and we still like our chances ahead of the jobs data on Friday especially with crude oil prices firmer over the past two sessions (albeit off yesterday’s highs).”
“The obvious risk for funds today is the FOMC minutes. Any sign of more serious concern that the strength of the USD could delay the economic recovery or more broadly policy liftoff this year would be the catalyst that pulls funds lower. The market could use this as an opportunity to buy the dip again ahead of Canadian payrolls (expected to be weak) this Friday but upside prospects for USDCAD are limited by a number of factors highlighted previously—and one new wrinkle introduced yesterday.”
“Firmer crude oil and narrower spreads are CAD-supportive but the market has adjusted lower to nearer our FV assessment for USDCAD based on these variables this morning; our FV estimate is 1.2377, a fraction off the overnight low.”
“Technically, USDCAD looks heavy on the short-term charts but key support at 1.2360/65 remains intact at this point. A break below here could see the USD tumble to 1.19/1.20 we think.”
“The CAD is getting some support from the crosses, however, with CADJPY testing the recent range highs and EURCAD especially looking offered and on course for 1.33.”
Key Quotes
“USDCAD has been trading heavy in recent sessions with funds managing to break below the 1.24 level briefly earlier this morning.”
“We have been calling for a correction in funds in recent days and we still like our chances ahead of the jobs data on Friday especially with crude oil prices firmer over the past two sessions (albeit off yesterday’s highs).”
“The obvious risk for funds today is the FOMC minutes. Any sign of more serious concern that the strength of the USD could delay the economic recovery or more broadly policy liftoff this year would be the catalyst that pulls funds lower. The market could use this as an opportunity to buy the dip again ahead of Canadian payrolls (expected to be weak) this Friday but upside prospects for USDCAD are limited by a number of factors highlighted previously—and one new wrinkle introduced yesterday.”
“Firmer crude oil and narrower spreads are CAD-supportive but the market has adjusted lower to nearer our FV assessment for USDCAD based on these variables this morning; our FV estimate is 1.2377, a fraction off the overnight low.”
“Technically, USDCAD looks heavy on the short-term charts but key support at 1.2360/65 remains intact at this point. A break below here could see the USD tumble to 1.19/1.20 we think.”
“The CAD is getting some support from the crosses, however, with CADJPY testing the recent range highs and EURCAD especially looking offered and on course for 1.33.”