12 Feb 2014
Flash: USD/CAD is still a bearish correction - TD Securities
FXStreet (Guatemala) - Shaun Osbourne, Chief FX Strategist at TD Securities said that the USD/CAD, with no data on tap, is still a short-term, corrective trend lower.
Key Quotes:
"USD/CAD retained a heavy bias yesterday overall even as US yields in the belly and longer end of the curve nudged higher and back in the USD’s favour after Yellen’s initial comments. The CAD was a bit of an outlier in yesterday afternoon’s session as USD/CAD slipped back to 1.10, closing on a weak note technically (and extending a little lower still through the overnight session). That suggests that the corrective bias lower for USD/CAD that has shaped trading recently remains a force in the market."
"Finance Minister Flaherty’s budget contained positive news—a string of budget surpluses starting from 2015—but the results were hardly surprising, even the larger than expected surplus projected for 2015 FY itself. The data underscore Canada’s solid AAA position but we don’t think the budget alters that much about the CAD’s outlook from here."
"With no data on tap, we think the short-term, corrective trend lower in USD/CAD will continue to play out in the short-term at least. The market is finding some support in the high 1.09 area, where the USD based last week, but a firmer floor will not be signaled from here unless USD/CAD climbs back through 1.1095/00. Corrective pressure risks extending to the low 1.09 area still, we think—a great opportunity for USD/CAD longs to reset."
Key Quotes:
"USD/CAD retained a heavy bias yesterday overall even as US yields in the belly and longer end of the curve nudged higher and back in the USD’s favour after Yellen’s initial comments. The CAD was a bit of an outlier in yesterday afternoon’s session as USD/CAD slipped back to 1.10, closing on a weak note technically (and extending a little lower still through the overnight session). That suggests that the corrective bias lower for USD/CAD that has shaped trading recently remains a force in the market."
"Finance Minister Flaherty’s budget contained positive news—a string of budget surpluses starting from 2015—but the results were hardly surprising, even the larger than expected surplus projected for 2015 FY itself. The data underscore Canada’s solid AAA position but we don’t think the budget alters that much about the CAD’s outlook from here."
"With no data on tap, we think the short-term, corrective trend lower in USD/CAD will continue to play out in the short-term at least. The market is finding some support in the high 1.09 area, where the USD based last week, but a firmer floor will not be signaled from here unless USD/CAD climbs back through 1.1095/00. Corrective pressure risks extending to the low 1.09 area still, we think—a great opportunity for USD/CAD longs to reset."