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23 Feb 2015
USD/CAD fundamentals supporting a test of 1.2799 – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, views that the fundamental backdrop for CAD supports a test and a potential break of 1.2799 levels.
Key Quotes
“CAD is weak, having lost 0.6% since Friday’s close, in line with the broad USD shift. For USDCAD it continues to trade within its month long 1.2314 to 1.2799 range; however the unfolding fundamental backdrop supports a test and potential break above 1.2799.”
“Recent developments for CAD have been negative (positive USDCAD) and support a test of its recent lows. In USDCAD terms, we would expect a near-term test of the January 30th high of 1.2799 and the potential to break above leading into the BoC interest rate decision.”
“USDCAD short‐term technicals: mixed—fundamentally we expect USDCAD to shift higher; however technicals are not confirming the shift.”
“The MACD remains in sell territory, candlesticks warn of bearish forces (unless spot closes above the February 12th open of 1.2632) and moving averages have yet to cross.”
“Accordingly the establishment of a long USDCAD trade likely needs near-term patience.”
Key Quotes
“CAD is weak, having lost 0.6% since Friday’s close, in line with the broad USD shift. For USDCAD it continues to trade within its month long 1.2314 to 1.2799 range; however the unfolding fundamental backdrop supports a test and potential break above 1.2799.”
“Recent developments for CAD have been negative (positive USDCAD) and support a test of its recent lows. In USDCAD terms, we would expect a near-term test of the January 30th high of 1.2799 and the potential to break above leading into the BoC interest rate decision.”
“USDCAD short‐term technicals: mixed—fundamentally we expect USDCAD to shift higher; however technicals are not confirming the shift.”
“The MACD remains in sell territory, candlesticks warn of bearish forces (unless spot closes above the February 12th open of 1.2632) and moving averages have yet to cross.”
“Accordingly the establishment of a long USDCAD trade likely needs near-term patience.”