7 Nov 2013
USD/CAD modestly higher, capped 1.0450
FXstreet.com (London) - USD/CAD is choppy but the market is not making much ground through key support or resistance points on the short-term charts, explained a research team at TD Securities.
The USD/CAD has benefitted from the ECB rate cut as well as an improvement in the US economy with GDP figures up on consensus. The markets attention will now be with eyes towards the NFP’s tomorrow. A sub 100k NFP print will be blamed on the government shutdown, and 150k+ should see 10yr USTs continue on their path lower. Meanwhile, the research team at TD Securities said, “The USD continues to find support in the low 1.04 area and resistance in the mid 1.04s—essentially sustaining the recent consolidation (potential bull flag—bullish above 1.0447) pattern. Momentum—one way or the other—seems to be the missing ingredient here. Daily charts tell a similar story to the views outlined above via the short-term charts. While support in the low 1.04 area holds, we think near-term risks continue to suggest a higher USD, at least to retest the 1.05 area”.
USD/CAD for 1.03 area?
“A sustained, short-term push below 1.04 would leave spot exposed to a drop back to the low 1.03 area, meanwhile. In a general sense, we are constructive on the USD outlook still—the short-term (daily) trend is higher, as is the medium-term (weekly) trend. We do think, however, that a move to the upside sooner rather than later is desirable otherwise the market might start thinking that sideways range trading will persist through the end of the year”.
The USD/CAD has benefitted from the ECB rate cut as well as an improvement in the US economy with GDP figures up on consensus. The markets attention will now be with eyes towards the NFP’s tomorrow. A sub 100k NFP print will be blamed on the government shutdown, and 150k+ should see 10yr USTs continue on their path lower. Meanwhile, the research team at TD Securities said, “The USD continues to find support in the low 1.04 area and resistance in the mid 1.04s—essentially sustaining the recent consolidation (potential bull flag—bullish above 1.0447) pattern. Momentum—one way or the other—seems to be the missing ingredient here. Daily charts tell a similar story to the views outlined above via the short-term charts. While support in the low 1.04 area holds, we think near-term risks continue to suggest a higher USD, at least to retest the 1.05 area”.
USD/CAD for 1.03 area?
“A sustained, short-term push below 1.04 would leave spot exposed to a drop back to the low 1.03 area, meanwhile. In a general sense, we are constructive on the USD outlook still—the short-term (daily) trend is higher, as is the medium-term (weekly) trend. We do think, however, that a move to the upside sooner rather than later is desirable otherwise the market might start thinking that sideways range trading will persist through the end of the year”.