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22 Aug 2014
USD/CAD: Stay long, target at 1.11 - TDS
FXStreet (Bali) - In view of Shaun Osborne, FX Strategist at TDS, recommends maintaining USDCAD longs positions with dips towards the 1.09 area to add to positions—or initiate longs.
Key Quotes
"Our CAD fair value regression model, utilising 5-year Canada-US spreads and Canadian terms of trade as inputs, suggest that the CAD remains overvalued, though the “stretch” is less egregious than in July. We estimate a fair value currently of USD0.90, or USDCAD 1.11. We think spot should make more progress towards fair value in the next few weeks."
"We recommend maintaining USDCAD longs positions and utilizing minor USDCAD dips to the 1.09 area to add to positions—or initiate longs for those not already long. We think counter-trend corrections in this market will remain shallow and short-lived. We are lifting the stop on our long recommendation to 1.0850 now and pushing the target on this trade to 1.11."
Key Quotes
"Our CAD fair value regression model, utilising 5-year Canada-US spreads and Canadian terms of trade as inputs, suggest that the CAD remains overvalued, though the “stretch” is less egregious than in July. We estimate a fair value currently of USD0.90, or USDCAD 1.11. We think spot should make more progress towards fair value in the next few weeks."
"We recommend maintaining USDCAD longs positions and utilizing minor USDCAD dips to the 1.09 area to add to positions—or initiate longs for those not already long. We think counter-trend corrections in this market will remain shallow and short-lived. We are lifting the stop on our long recommendation to 1.0850 now and pushing the target on this trade to 1.11."