3 Feb 2015
Look at CAD’s strength as a selling opportunity – TDS
FXStreet (Barcelona) - Shaun Osborne, Chief FX Strategist at TD Securities, suggests going long on the USD/CAD pair, noting that in spite of the short-term retracement risks, the larger trend still remains bullish.
Key Quotes
“Interestingly, or perhaps just coincidentally, the last couple of years where USDCAD has had the “fast start” to the year in January that we warned seasonal trends were pointing to again this year, the USD rally has stalled temporarily right around the turn of the month. New highs were still reached in Q1 2013 and 2014 before a broader consolidation set in through Q2 in both years.”
“Even the longer term seasonal study suggests quick, early gains in the new calendar year are typically followed by a consolidation and rebound later in Q1.”
“In short, we think the softer undertone in USDCAD may extend modestly near-term but it will not last.”
“We remain inclined to look at CAD strength as a selling opportunity.”
“From a chart perspective, we note retracement support at 1.2512 and perhaps more important short-term, hi-lo support (likely to be pivotal near-term) at 1.2495; below here and losses may extend more aggressively to the low 1.23s.”
“We still think the underlying trend higher is intact so we will look for opportunities to get long.”
Key Quotes
“Interestingly, or perhaps just coincidentally, the last couple of years where USDCAD has had the “fast start” to the year in January that we warned seasonal trends were pointing to again this year, the USD rally has stalled temporarily right around the turn of the month. New highs were still reached in Q1 2013 and 2014 before a broader consolidation set in through Q2 in both years.”
“Even the longer term seasonal study suggests quick, early gains in the new calendar year are typically followed by a consolidation and rebound later in Q1.”
“In short, we think the softer undertone in USDCAD may extend modestly near-term but it will not last.”
“We remain inclined to look at CAD strength as a selling opportunity.”
“From a chart perspective, we note retracement support at 1.2512 and perhaps more important short-term, hi-lo support (likely to be pivotal near-term) at 1.2495; below here and losses may extend more aggressively to the low 1.23s.”
“We still think the underlying trend higher is intact so we will look for opportunities to get long.”