20 Feb 2015
USD/CAD should firm modestly in range – TDS
FXStreet (Barcelona) - Shaun Osborne, Chief FX Strategist at TD Securities, explains that with there is a mild undervaluation in USD/CAD when compared to the fair value, and as such a move higher might be seen in the short-term particularly on a break above 1.2475/80.
Key Quotes
“Our USDCAD FV model based on spreads and terms of trade suggests a mild USDCAD undervaluation this morning relative to the estimated fair value (1.2607).”
“We look for modest gains near-term as a consequence but we do not think there is much scope for USDCAD to extend significantly higher at this point.”
“In fact, we remain somewhat cautious on the outlook for funds in the next few weeks as seasonality suggests a range trade environment ahead of the potential for an April dip in the USD.”
“Short-term charts are modestly constructive as our session gets underway. A strong-ish rejection of support in the low 1.24 area in late morning London trade may see USDCAD strengthen a little closer to our estimated FV if spot can break short-term resistance at 1.2475/80 intraday.”
“Support is 1.2420/25 and (stronger) 1.2395/00.”
Key Quotes
“Our USDCAD FV model based on spreads and terms of trade suggests a mild USDCAD undervaluation this morning relative to the estimated fair value (1.2607).”
“We look for modest gains near-term as a consequence but we do not think there is much scope for USDCAD to extend significantly higher at this point.”
“In fact, we remain somewhat cautious on the outlook for funds in the next few weeks as seasonality suggests a range trade environment ahead of the potential for an April dip in the USD.”
“Short-term charts are modestly constructive as our session gets underway. A strong-ish rejection of support in the low 1.24 area in late morning London trade may see USDCAD strengthen a little closer to our estimated FV if spot can break short-term resistance at 1.2475/80 intraday.”
“Support is 1.2420/25 and (stronger) 1.2395/00.”