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21 May 2015
USD/CAD remains a buy on dips for 1.24 – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities, maintain their buy on dips bias on USD/CAD, expecting USD to enjoy a bid tone until Friday’s US CPI report.
Key Quotes
“We advocate a buy-on-dip strategy for USDCAD and we like funds higher over the coming months on the basis that the Canadian economic outlook in H2-2015 is overstated by the Bank of Canada.”
“We are biased to see funds move higher today. There is no data in Canada until tomorrow with the dual release of CPI and retail sales but we will receive a smattering of US economic data. We would pay particular attention to the simultaneous release of the April existing home sales (TD: 5.30M, market: 5.23M, prior: 5.19M) and the May Philly Fed Survey (TD: 12.0, market: 8.0, prior: 7.5) where we see upside risks to both relative to the market. This should leave USD with a bid tone until Friday’s CPI report.”
“On the charts, we broke resistance earlier this week as markets positioned for a more cautious Poloz (which the Governor did not deliver), but the rally in funds did open up an air pocket that puts 1.24 on our near-term radar.”
“CFTC data indicates that net short positions have been scaled back, especially among the leveraged funds community, but market sentiment around the CAD remains bearish.”
Key Quotes
“We advocate a buy-on-dip strategy for USDCAD and we like funds higher over the coming months on the basis that the Canadian economic outlook in H2-2015 is overstated by the Bank of Canada.”
“We are biased to see funds move higher today. There is no data in Canada until tomorrow with the dual release of CPI and retail sales but we will receive a smattering of US economic data. We would pay particular attention to the simultaneous release of the April existing home sales (TD: 5.30M, market: 5.23M, prior: 5.19M) and the May Philly Fed Survey (TD: 12.0, market: 8.0, prior: 7.5) where we see upside risks to both relative to the market. This should leave USD with a bid tone until Friday’s CPI report.”
“On the charts, we broke resistance earlier this week as markets positioned for a more cautious Poloz (which the Governor did not deliver), but the rally in funds did open up an air pocket that puts 1.24 on our near-term radar.”
“CFTC data indicates that net short positions have been scaled back, especially among the leveraged funds community, but market sentiment around the CAD remains bearish.”