The pair’s downside could put the critical 1.3000 support to the test in the next weeks, suggested Rischard Franulovich, Strategist at Westpac.
Key Quotes
“Some cautionary signals warn USD/CAD’s fall is complete – key tech support back to Aug 2014 resides close by at 1.3250 and the size and duration of the correction off 1.47 now broadly matches the metrics of earlier reversals (Mar-May 2015 & Aug-Oct 2015)”.
“That said, rates markets could fuel another leg down in USD/CAD, a non-negligible 10bp in BoC easing priced in by year’s end yet the BoC seems unlikely to deliver that now that energy prices have stabilised and US growth is looking is stronger early in 2016”.
“Potential for fresh fi scal stimulus in the 22 Mar federal budget could trigger yet more CAD gains. USD/CAD could break 1.30 in coming weeks but it’s a long term buy into 1.2850”.
(Market News Provided by FXstreet)
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