8 Jul 2015
Bullish on USD/CAD into the FOMC Minutes – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities remain bullish on USD/CAD into the FOMC Meeting Minutes, and see gains towards 1.2835 if the pair breaks above the resistance at 1.2780.
Key Quotes
“We remain USDCAD bulls ahead of today’s FOMC minutes as we think that the risk is that the minutes sound more constructive than Yellen did at the June press conference. The minutes should still show a bias to raise rates later this year but there is a risk that given the China equity crash and the Greek saga that the markets will view a tighter policy narrative as stale. Indeed, markets have not full priced in a rate hike until Q1 next year.”
“Perhaps the best way to characterize the Fed now is that it is in a wait-and-see mode. We remain in the September rate hike camp, but we do see that the longer the turmoil abroad persists the less confident the Fed will feel in lifting policy insofar as it impacts confidence and growth domestically. So, we are not ready to throw in the towel just yet, as we still think that the Fed has a desire to lift policy this year given the months of Fed speak to talk up 2015 hikes.”
“Our daily fair value estimate for USDCAD stands at 1.2725. There looks to be some resistance around the 1.2780 area (near the March 31st highs) and a breach above there would put 1.2835 on the radar (the March 18th high).”
Key Quotes
“We remain USDCAD bulls ahead of today’s FOMC minutes as we think that the risk is that the minutes sound more constructive than Yellen did at the June press conference. The minutes should still show a bias to raise rates later this year but there is a risk that given the China equity crash and the Greek saga that the markets will view a tighter policy narrative as stale. Indeed, markets have not full priced in a rate hike until Q1 next year.”
“Perhaps the best way to characterize the Fed now is that it is in a wait-and-see mode. We remain in the September rate hike camp, but we do see that the longer the turmoil abroad persists the less confident the Fed will feel in lifting policy insofar as it impacts confidence and growth domestically. So, we are not ready to throw in the towel just yet, as we still think that the Fed has a desire to lift policy this year given the months of Fed speak to talk up 2015 hikes.”
“Our daily fair value estimate for USDCAD stands at 1.2725. There looks to be some resistance around the 1.2780 area (near the March 31st highs) and a breach above there would put 1.2835 on the radar (the March 18th high).”