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20 Feb 2014
Flash: USD/CAD to test 1.1200? - TD Securities
FXStreet (Guatemala) - Shaun Osbourne, Chief FX Strategist at TD Securities explained that weak data Friday on should push USD/CAD higher towards a retest of the 1.12 area.
Key Quotes:
"Yesterday morning, we asked if the corrective move lower in USD/CAD was played out and felt that the evidence suggested that an important low was possibly forming. The market endorsed that view emphatically shortly afterwards, ultimately driving the USD to its biggest 1-day gain (in percentage terms) against the CAD since late 2011. The firmer USD was clearly signaled by the pick up in short-term technical signals that we highlighted yesterday morning but the acceleration higher in funds was still quite surprising."
"Speculation of M&A flows helped the move extend to some degree but we do not think this had a material impact on the spot market. Rather, USD/CAD bulls had been biding their time looking for a dip to rebuild USD longs and yesterday was a prime opportunity to get short CAD ahead of Friday’s key data releases."
"The poor Canadian wholesale sales data served as a reminder why the CAD has been tracking lower recently. The wholesale sales data suggest that activity in the Canadian economy ended the year on the sluggish note and serve as a warning of what sort of outcome we might get from the retail sales data Friday (we look for weak, weather related data here too)."
"Intraday, we look for firm support on dips to the low 1.10 area. Weak data Friday should push USD/CAD higher towards a retest of the 1.12 area."
Key Quotes:
"Yesterday morning, we asked if the corrective move lower in USD/CAD was played out and felt that the evidence suggested that an important low was possibly forming. The market endorsed that view emphatically shortly afterwards, ultimately driving the USD to its biggest 1-day gain (in percentage terms) against the CAD since late 2011. The firmer USD was clearly signaled by the pick up in short-term technical signals that we highlighted yesterday morning but the acceleration higher in funds was still quite surprising."
"Speculation of M&A flows helped the move extend to some degree but we do not think this had a material impact on the spot market. Rather, USD/CAD bulls had been biding their time looking for a dip to rebuild USD longs and yesterday was a prime opportunity to get short CAD ahead of Friday’s key data releases."
"The poor Canadian wholesale sales data served as a reminder why the CAD has been tracking lower recently. The wholesale sales data suggest that activity in the Canadian economy ended the year on the sluggish note and serve as a warning of what sort of outcome we might get from the retail sales data Friday (we look for weak, weather related data here too)."
"Intraday, we look for firm support on dips to the low 1.10 area. Weak data Friday should push USD/CAD higher towards a retest of the 1.12 area."