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USD/CAD outlook remains constructive – Rabobank

FXStreet (Edinburgh) - Strategist at Rabobank Christian Lawrence has assessed the constructive outlook on USD/CAD.

Key Quotes

“Last month we stated our view that USD/CAD would likely trade sideways within a 1.30 to 1.34 range and this call came to fruition with a 1.301 to 1.341 range in September”.

“It will come as little surprise that oil prices have been range-bound over the past month as well, with WTI trading a low of USD 43.2 and a high of 48.8”.

“Indeed, the correlation between oil and USD/CAD remains high and stable at around 60% (3mth rolling daily % return basis)”.

“Last month we noted the battle of the CAD drivers between interest rate differentials and oil prices”.

“At the time of writing USD/CAD is breaking up through 1.34, but we would want to see a confirmed break (a daily close followed by a second higher close) before nullifying the range”.

“In terms of momentum indicators, USD/CAD is firmly in neutral territory which of course is a reflection of the sideways price action”.

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