13 Aug 2015
USD/CAD outlook remains neutral to bearish – Scotiabank
FXStreet (Edinburgh) - Eric Theoret, Currency Strategist at Scotiabank, noted the neutral-to-bearish stance around the pair in the near term.
Key Quotes
“CAD remains sensitive to its core drivers of relative policy and oil prices, the former providing for most of the recent CAD strength through a week in which markets have reassessed the Fed path in light of China as well as the softened tone from both Fed Vice Chair Fischer and NY Fed President Dudley”.
“CAD is trading in tandem with the 2Y U.S.-Canada yield spread, having broken its tight correlation to oil prices over the past week”.
“Near term risk lies with the U.S. releases and their influence on expectations for the Fed path—providing for a tightened focus on the U.S. import price and retail sales figures”.
“The MACD is increasingly biased to further downside and the RSI is threatening a near term break below 50. USDCAD has made a material break of its short term MA’s, closing well below its 21 day MA for the first time since late June”.
“Near term support is expected between 1.2920 and 1.2950, the levels closely representing the real body of the July 29 hammer doji. The 1.3000 will remain psychologically important and we look to near term resistance at 1.3100 with gains likely to be restrained above 1.3150”.
Key Quotes
“CAD remains sensitive to its core drivers of relative policy and oil prices, the former providing for most of the recent CAD strength through a week in which markets have reassessed the Fed path in light of China as well as the softened tone from both Fed Vice Chair Fischer and NY Fed President Dudley”.
“CAD is trading in tandem with the 2Y U.S.-Canada yield spread, having broken its tight correlation to oil prices over the past week”.
“Near term risk lies with the U.S. releases and their influence on expectations for the Fed path—providing for a tightened focus on the U.S. import price and retail sales figures”.
“The MACD is increasingly biased to further downside and the RSI is threatening a near term break below 50. USDCAD has made a material break of its short term MA’s, closing well below its 21 day MA for the first time since late June”.
“Near term support is expected between 1.2920 and 1.2950, the levels closely representing the real body of the July 29 hammer doji. The 1.3000 will remain psychologically important and we look to near term resistance at 1.3100 with gains likely to be restrained above 1.3150”.