FXStreet (Edinburgh) – According to Strategist at Westpac Richard Franulovich, the pair could face a consolidative pattern ahead of a potential visit of the 1.50 handle.
Key Quotes
“A steady BoC hand and the sharp recovery in energy prices / risk appetite has spun the atmospherics on CAD sharply”.
“A run at 1.50 in 2016 however remains the base case, though not before some more consolidation first”.
“The last 18 months’ price action in USD/CAD yields some useful clues, the period encompassing three strong double digit rallies (+15/20 big figures) interspersed by a couple rangebound/countertrend episodes lasting about 3-4 months where USD/CAD unwound a good 1/3 of its earlier gains”.
“Those metrics suggest USD/CAD can fall as far as 1.38 and trade with a broadly consolidative tone for the balance of Q1 and into Q2 before the next leg higher commences. The BoC should cut rates by mid-2016”.
(Market News Provided by FXstreet)