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14 Aug 2015
USD/CAD poised for a 1.2950-1.3160 range – TDS
FXStreet (Edinburgh) - Strategists at TD Securities believe the pair is poised to meander in the current 1.2950-1.3160 range.
Key Quotes
“We think the balance of risk around USDCAD is tilted to the downside. Nonetheless, we do think that funds can hold within a fairly wide 1.2950-1.3160 range. A break below the lower bound would open up downside potential to the figure but we expect funds to be met with buying interest near those levels. The data will be closely watched for validation that the positive surprise on the June trade balance was not a fluke”.
“Positive US data today should help remind markets that all is not lost for the September meeting and that the Fed is still in play. Market pricing has edged higher to a roughly 50% chance of a hike next month”.
“So what does the US data mean for the funds? If we are right in the upside risk around Canadian manufacturing sales and respectable US data, we are likely to get a short-lived pull lower in USDCAD. Our daily fair value estimate for USDCAD is in line with spot at the moment around 1.3060”.
Key Quotes
“We think the balance of risk around USDCAD is tilted to the downside. Nonetheless, we do think that funds can hold within a fairly wide 1.2950-1.3160 range. A break below the lower bound would open up downside potential to the figure but we expect funds to be met with buying interest near those levels. The data will be closely watched for validation that the positive surprise on the June trade balance was not a fluke”.
“Positive US data today should help remind markets that all is not lost for the September meeting and that the Fed is still in play. Market pricing has edged higher to a roughly 50% chance of a hike next month”.
“So what does the US data mean for the funds? If we are right in the upside risk around Canadian manufacturing sales and respectable US data, we are likely to get a short-lived pull lower in USDCAD. Our daily fair value estimate for USDCAD is in line with spot at the moment around 1.3060”.