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20 Feb 2013
Forex Flash: USD/CAD to close above 1.0135 and then target 1.0250 – TD Securities
The CAD stopped following the upward track in US stocks and continues its under-performance since last Friday. “As we have noted recently, there appears to have been a structural break in January in the way the markets operated in the post-crisis environment”, wrote analysts Shaun Osborne and Greg Moore. TD Securities analysts believe “the risk on/off influence on the CAD has faded quickly over the past month or so, with interest rate spreads (i.e. domestic data developments) having more influence over the CAD these days”.
Technically, yesterday's soft-ish close did not represent any sort of real set-back for the positive outlook: "We still think the move up through 1.0050/1.00 over the past few days is significant and we continue to view the broader trend up as well entrenched in the market", they said, pointing to a close above 1.0135 (medium-term retracement resistance) to open up the topside for 1.0250. "Solid underlying trend momentum means modest USD/CAD dips are a buy", they concluded.
Technically, yesterday's soft-ish close did not represent any sort of real set-back for the positive outlook: "We still think the move up through 1.0050/1.00 over the past few days is significant and we continue to view the broader trend up as well entrenched in the market", they said, pointing to a close above 1.0135 (medium-term retracement resistance) to open up the topside for 1.0250. "Solid underlying trend momentum means modest USD/CAD dips are a buy", they concluded.