Back
14 May 2015
USD/CAD break below 1.1930 opens up 1.1850/70 area – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities, see downside potential for USD/CAD towards 1.1850/70 on a break below 1.1930, but warn of a potential snapback in the next week from an expected dovish tone of Governor Poloz’s speech.
Key Quotes
“An erratic trading session yesterday with USDCAD testing key technical support level of 1.1930. Funds briefly breached below in the overnight session and continues to trade with a heavy tone. A sustained break below support would open up downside potential to the 1.1850/70 area. Below that, there isn’t strong support for another 2-big figures lower.”
“We are bit skeptical that we can push substantially lower from here; we would caution our readers that what is bad for the US will not bode well for Canada either. And, judging by the topic of Governor Poloz’s speech next week on “The Way Home: Reading the Economic Signs”, we think he may use this as an opportunity to sound a bit more cautious with US data underwhelming recently.”
“So, this will be a significant speech that will come just ahead of the Bank’s blackout period and the interest rate decision on May 28th. If a dovish tone prevails this will leave USDCAD vulnerable to a snapback.”
“Funds is trading substantially below our daily model estimate of around 1.2100.”
Key Quotes
“An erratic trading session yesterday with USDCAD testing key technical support level of 1.1930. Funds briefly breached below in the overnight session and continues to trade with a heavy tone. A sustained break below support would open up downside potential to the 1.1850/70 area. Below that, there isn’t strong support for another 2-big figures lower.”
“We are bit skeptical that we can push substantially lower from here; we would caution our readers that what is bad for the US will not bode well for Canada either. And, judging by the topic of Governor Poloz’s speech next week on “The Way Home: Reading the Economic Signs”, we think he may use this as an opportunity to sound a bit more cautious with US data underwhelming recently.”
“So, this will be a significant speech that will come just ahead of the Bank’s blackout period and the interest rate decision on May 28th. If a dovish tone prevails this will leave USDCAD vulnerable to a snapback.”
“Funds is trading substantially below our daily model estimate of around 1.2100.”