21 Aug 2013
Flash: USD/CAD make or break - TD Securities
FXstreet.com (London) - Research teams at TD Securities noted have suggested that the weak Canadian wholesale trade data yesterday suggests downside risks for growth overall in June and sets the CAD up for a potentially bumpy ride into the end of the week, with retail sales data due tomorrow and CPI on Friday.
Key Quotes:
"The CAD’s recovery form the early July low has been underpinned by supportive short-term spreads vs. the USD but the yield premium at the 2-y sector of the curve at around 85bps is close to the upper end of the recent trading range and softer domestic data may prompt a modest correction in the spread back to nearer levels prevailing at the start of last month when the CAD found itself under pressure".
"On the charts, the rebound in USD/CAD this week is reaching a ’make or break’ point in the mid 1.04 area".
"USD/CAD closing above the 40-day MA is bullish and short-term trend momentum supports the better bid tone".
"A move through 1.0450 in the next day or two should pave the way for a rally to 1.0600/50".
Key Quotes:
"The CAD’s recovery form the early July low has been underpinned by supportive short-term spreads vs. the USD but the yield premium at the 2-y sector of the curve at around 85bps is close to the upper end of the recent trading range and softer domestic data may prompt a modest correction in the spread back to nearer levels prevailing at the start of last month when the CAD found itself under pressure".
"On the charts, the rebound in USD/CAD this week is reaching a ’make or break’ point in the mid 1.04 area".
"USD/CAD closing above the 40-day MA is bullish and short-term trend momentum supports the better bid tone".
"A move through 1.0450 in the next day or two should pave the way for a rally to 1.0600/50".