26 Jun 2014
USD/CAD remains under pressure - TD Securities
FXStreet (Łódź) - The TD Securities FX research team point out that USDCAD remains under pressure, with the leak lower through stops in the low 1.07 area overnight putting more pressure on the psychological support zone around the figure.
Key quotes
"There may still be some barrier-related interest to buy USD’s ahead of the 1.07 line but we have to concede that the market’s failure to hold medium-term retracement support in the low 1.07 area so far this week leaves the door open to more softness in the short-run as investors continue to unwind short CAD positions."
"There has been no additional news to drive the CAD higher overnight and we view the rebound as largely position-related in the wake of last week’s stronger than expected Canadian CPI and retail sales data."
"Given the drop in US yields this week, we would highlight that US-Canada spreads have not moved materially against the USD; in fact, in the belly of the curve, spreads remain at quite USD-supportive levels."
"Regardless, it is pointless trying to fight the trend in the market at the moment and the sell-off in funds has a lot of technical momentum behind it at the moment so we are unwilling to fight the trend."
" Loss of support in the 1.07 area through the close of the week will open up the downside a little more at least for a push to the 1.0600/50 range. "
"Short-term charts suggest that there might be something of a slightly better bid tone for funds developing as our session gets under way but USD gains will have to extend through 1.0725/30 for the USD to have a chance at pushing a bit more materially higher. "
Key quotes
"There may still be some barrier-related interest to buy USD’s ahead of the 1.07 line but we have to concede that the market’s failure to hold medium-term retracement support in the low 1.07 area so far this week leaves the door open to more softness in the short-run as investors continue to unwind short CAD positions."
"There has been no additional news to drive the CAD higher overnight and we view the rebound as largely position-related in the wake of last week’s stronger than expected Canadian CPI and retail sales data."
"Given the drop in US yields this week, we would highlight that US-Canada spreads have not moved materially against the USD; in fact, in the belly of the curve, spreads remain at quite USD-supportive levels."
"Regardless, it is pointless trying to fight the trend in the market at the moment and the sell-off in funds has a lot of technical momentum behind it at the moment so we are unwilling to fight the trend."
" Loss of support in the 1.07 area through the close of the week will open up the downside a little more at least for a push to the 1.0600/50 range. "
"Short-term charts suggest that there might be something of a slightly better bid tone for funds developing as our session gets under way but USD gains will have to extend through 1.0725/30 for the USD to have a chance at pushing a bit more materially higher. "