FXStreet (Delhi) – Research Team at TD Securities, suggest that with no data in Canada today, the focus will be exclusively on the Fed.
Key Quotes
“Without the added benefit of a press conference or an updated forecast, there is no incentive for the Fed to tinker much with the statement beyond the growth assessment, which is expected to be downgraded. But, with little changes elsewhere (and benchmarked to the September statement), USDCAD is prone to two-way risk.”
“The technical picture remains mildly constructive for USDCAD however and we think funds will eventually challenge 1.3300 if the Fed’s statement is not dovish enough.”
“We like being long USDCAD through most of this week and we think buying on dips makes strategic sense. In the event of a very dovish outcome, we see initial support at 1.3215/20 but a break below should almost immediately test 1.3180. We see ultimate support at 1.3100/20 which is close to our fair value estimate of 1.3090. On the crosses, we would look to fade a EURCAD rally toward 1.4800 on a very dovish Fed as we think it will attract EUR cross sellers.”
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