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USD/CAD range trade holds - TD Securities

FXStreet (Łódź) - The TD Securities team of experts point out that there is not much Canadian market-moving data this week and that CAD will most probably remain a sideshow for the markets in the near-term.

Key quotes

"USD/CAD continues to carve out a well-defined trading range between firm support around 1.12 and corporate and other interest to sell nearer 1.13."

"We remain cautious on the near-term potential for the USD build on its recent gains through the end of the tear; positioning remains extensively long USD among speculative investors (even if Friday’s data showed a marginal decline in the record aggregate long USD position seen in the October 14th week’s data, the USD42.2bn total remains very large by historic standards) and there is a seasonal tendency for the USD to slip broadly in the last couple of months of the year."

"But there are some clear impediments to the CAD recovering much ground at the moment; commodity prices remain under pressure and it is notable that WTI continues to pressure the $80/bbl area. And the Bank of Canada seems happy to sit on the sidelines for now and reflect on the challenges facing the domestic economy as the Fed moves towards policy normalization."

"It’s a range trade for funds now but we still think USDCAD is likely to reach 1.15 in H1 next year and minor, corrective dips in funds in the next few weeks will be a buying opportunity."

"On the charts, the last three or four days have shown little real directional intent but the early bias looks a little more constructive on the short-term charts and weak oil prices hovering near the mid-October low may encourage a push through 1.1235/40 in early trading to signal a push back up towards 1.13."

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