27 Jan 2015
USD/CAD remains compellingly bullish – TDS
FXStreet (Barcelona) - Shaun Osborne, Chief FX Strategist at TD Securities, feels that the USD/CAD pair is compellingly bullish, with all the time-intervals favouring a bull trend for the pair.
Key Quotes
“After the initial spurt higher on the BoC rate shock last week, USDCAD has reverted to a slow and steady grinding bid. So far today, the CAD is under-performing broadly and is the only major currency down against a generally softer USD.”
“Gains flirting with the 1.25 area, which is not out of line with our own fundamental equilibrium estimate, based on a regression of terms of trade and 5-year US-Canada spreads; the model estimates fair value around 1.2420 currently, based on last night’s closing data.”
“The weekly Bloomberg-Nanos Canadian Confidence Index is not a widely-followed market indicator but data yesterday highlighted how much the slide in oil prices in recent weeks has impacted domestic sentiment; The headline data showed expectations for weaker economic growth rose to the highest since 2011 and the spread between those predicting a stronger economy and those looking for weaker economic conditions held near the narrowest levels since the recession, according to Bloomberg. “
“The technical picture for USDCAD remains compellingly bullish; the slow grind higher in the USD is not that well-supported by the trend oscillators on the short-term charts—which leaves the door open for intraday lurches lower, potentially—but the broader, bull trend is still deeply entrenched on the short, medium and longer-term studies. That implies a solid underlying track higher will continue and allows for only limited, counter-trend corrections at present.”
Key Quotes
“After the initial spurt higher on the BoC rate shock last week, USDCAD has reverted to a slow and steady grinding bid. So far today, the CAD is under-performing broadly and is the only major currency down against a generally softer USD.”
“Gains flirting with the 1.25 area, which is not out of line with our own fundamental equilibrium estimate, based on a regression of terms of trade and 5-year US-Canada spreads; the model estimates fair value around 1.2420 currently, based on last night’s closing data.”
“The weekly Bloomberg-Nanos Canadian Confidence Index is not a widely-followed market indicator but data yesterday highlighted how much the slide in oil prices in recent weeks has impacted domestic sentiment; The headline data showed expectations for weaker economic growth rose to the highest since 2011 and the spread between those predicting a stronger economy and those looking for weaker economic conditions held near the narrowest levels since the recession, according to Bloomberg. “
“The technical picture for USDCAD remains compellingly bullish; the slow grind higher in the USD is not that well-supported by the trend oscillators on the short-term charts—which leaves the door open for intraday lurches lower, potentially—but the broader, bull trend is still deeply entrenched on the short, medium and longer-term studies. That implies a solid underlying track higher will continue and allows for only limited, counter-trend corrections at present.”