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USDCAD: Bulls trying to resurface again - TDS

FXStreet (Delhi) – Research Team at TDS, suggest that the negative tone on the USD and cross EUR selling (versus the CAD) has placed some pressure on USDCAD which broke a key support through the figure but funds has now moved into the “buy zone” we have mentioned recently of 1.28/1.29.

Key Quotes

“Momentum tilts negatively for USDCAD still and taken in tandem that we see downside risks to today’s US CPI data may see soft support around the 1.2860/70 area challenged (which is not far from spot at the moment) . We see more durable support at 1.2800, which is where we see fair value at the moment.”

“With US growth showing signs of slippage (note the Atlanta Fed’s latest estimate for Q3 sits below 1.0% annualized), Canada’s growth rebalancing story may be challenged. Paired with idiosyncratic risks in the domestic economy (structurally challenged), Canada’s growth outlook may begin to tilt to the downside—sort of along the lines of “if the US sneezes, the rest of the world catches a cold”. As such, this may limit downside in USDCAD.”

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