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Bullish outlook for USD/CAD - TD Securities

FXStreet (Łódź) - The TD Securities team of experts observe that the headwinds for the CAD such as weaker commodities, continue this week so the bull trend for USD/CAD should remain in place for now.

Key quotes

"The week ahead will be hallmarked by two dual releases in the form of US and Canadian trade figures tomorrow and both countries’ employment reports on Friday."

"In a nutshell, we are expecting Canadian trade to surprise on the upside and we have an on-consensus view on Canadian employment, whereas we are slightly below consensus on US trade but above consensus on US employment."

"The first hurdle for the CAD will be trade—and we think risks here are somewhat asymmetric; ok-to-good data do little positive for the CAD but another disappointing outcome will hurt the CAD more. If both our employment forecasts come to fruition (-10K in Canada vs +239K in the US), funds will surely have another big up day Friday."

"Governor Poloz speaks this afternoon at an event organized by the Canadian Council for Public Private Partnerships. We do not expect his speech to break new ground on the BoC latest thinking but the press conference scheduled at 14.00ET bears watching, as it will provide journalists the opportunities to ask the questions they could not ask upon the release of the MPR on October 22nd."

"We remain conviction bulls on USDCAD; the headwinds we noted for the CAD last week—softer commodities and wider (more USD-supportive– remain evident at the start of the week and the charts are shaping up quite bullishly; the 40-day MA hold last week suggests the broader bull trend is intact, the consolidation (bull flag) break out points to more immediate gains and new highs, the higher weekly high negates a mildly negative weekly candle in the week before last."

"We think modest dips are a buy and we would be reluctant to fade gains from here—USDCAD is shaping up for a move (recall weekly technicals point to 1.18+)."

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