17 Jul 2015
USD/CAD: next stop, 1.3065 – Scotiabank
FXStreet (Edinburgh) - Currency Strategist Eric Theoret at Scotiabank noted the bullish outlook for the pair in the near term.
Key Quotes
“CAD is soft, falling to fresh multi-year lows as it approaches key psychological levels and the 2009 low at 0.7654 (USDCAD at 1.3065)”.
“Both relative policy and commodity prices are currently driving CAD as market participants consider greater BoC policy divergence to the Fed, with the latter providing pressure to commodity prices via the broader USD. We see a potential medium term risk for CAD as market participants reassess the implications of stronger U.S. growth and its impact on Canada”.
“USDCAD is making fresh multi-year highs as it flirts with a test of 1.3000. The focus is on the 2009 high 1.3065, a break of which would likely generate a wave of continued buying and thus shift the psychological focus to whole numbers such as 1.3100, 1.3200, etc...”.
“However we note the emergence of negative divergence in USDCAD, with bullish momentum indicators unable to make fresh highs alongside spot, suggesting some vulnerability to the current rally”.
Key Quotes
“CAD is soft, falling to fresh multi-year lows as it approaches key psychological levels and the 2009 low at 0.7654 (USDCAD at 1.3065)”.
“Both relative policy and commodity prices are currently driving CAD as market participants consider greater BoC policy divergence to the Fed, with the latter providing pressure to commodity prices via the broader USD. We see a potential medium term risk for CAD as market participants reassess the implications of stronger U.S. growth and its impact on Canada”.
“USDCAD is making fresh multi-year highs as it flirts with a test of 1.3000. The focus is on the 2009 high 1.3065, a break of which would likely generate a wave of continued buying and thus shift the psychological focus to whole numbers such as 1.3100, 1.3200, etc...”.
“However we note the emergence of negative divergence in USDCAD, with bullish momentum indicators unable to make fresh highs alongside spot, suggesting some vulnerability to the current rally”.