FXStreet (Barcelona) – FX Strategists at TD Securities, note that USD/CAD remains cheap when compared to their fair value estimate, but below 1.2280 might lead to losses towards 1.22, while above 1.2350 will shift the outlook to positive.
Key Quotes
“Absent any top-tier data in Canada again today, we look for external influences and technical factors to continue driving the CAD. Softer commodity prices and wider US-Canada spreads are supportive for funds (we estimate Fair Vale for USDCAD this morning is 1.2399—about a big figure higher than spot currently).”
“Price action suggests a heightened level of indecision in the market with regard to the near-term direction in funds.”
“We think the heavy pressure on USDCAD over the past week is abating a little and while a clear low/reversal is not obvious in terms of price action at this point (leaving the door open for a drop to the high 1.21s), we think intraday gains back above 1.2350 would be a positive development for USDCAD (and target a move the 1.2450/1.25 early next week); weakness below 1.2280/90 this morning would shift the technical balance of risks back to the downside and a push to 1.22.”
“Note NZDCAD is heading for a very soft close on the week below major support at 0.8615/25 (we think the cross is heading to 0.76).”
(Market News Provided by FXstreet)