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15 May 2015
USD/CAD targeting 1.21 – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities, explain that the technical patterns in USD/CAD remain in favour of a move towards 1.21 levels, but some intraday pressure could be seen due to the Canadian data releases.
Key Quotes
“USDCAD is pushing above 1.20 as the North American session gets underway, suggesting that, once again, the 1.1920/30 level has proven to be important support for funds. Yesterday, we bounced sharply off these lows and finished firmer on the day; a close nearer 1.2050 on the week would provide a greater degree of comfort that a more significant break lower in funds is less likely.”
“Data risks today may exert some intraday pressure on funds briefly. We expect Canadian manufacturing sales to rise 0.9% m/m (market: 1.0%).”
“We think USDCAD will trade asymmetrically around the release; given the heavy tone in which USDCAD has traded this week (save for yesterday and this morning) soft data may not have that much of an impact on funds. An upside surprise will, however, likely prompt a strong, positive response as shorts are forced to cover.”
“On the charts, the early bid tone to USDCAD looks poised to extend a little more; there is a minor base/bull reversal feature on the hourly chart, which gains through the 1.1990/00 area (now support) appears to have put in play; the formation (minor, inverse H&S low) targets a move up to 1.21. We spot stronger resistance at 1.2200; major support remains 1.1925/45.”
Key Quotes
“USDCAD is pushing above 1.20 as the North American session gets underway, suggesting that, once again, the 1.1920/30 level has proven to be important support for funds. Yesterday, we bounced sharply off these lows and finished firmer on the day; a close nearer 1.2050 on the week would provide a greater degree of comfort that a more significant break lower in funds is less likely.”
“Data risks today may exert some intraday pressure on funds briefly. We expect Canadian manufacturing sales to rise 0.9% m/m (market: 1.0%).”
“We think USDCAD will trade asymmetrically around the release; given the heavy tone in which USDCAD has traded this week (save for yesterday and this morning) soft data may not have that much of an impact on funds. An upside surprise will, however, likely prompt a strong, positive response as shorts are forced to cover.”
“On the charts, the early bid tone to USDCAD looks poised to extend a little more; there is a minor base/bull reversal feature on the hourly chart, which gains through the 1.1990/00 area (now support) appears to have put in play; the formation (minor, inverse H&S low) targets a move up to 1.21. We spot stronger resistance at 1.2200; major support remains 1.1925/45.”