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19 Aug 2013
USD/CAD trading at the pivot
FXstreet.com (Barcelona) - USD/CAD is a quiet play on a light calendar in the starting days of this week.
“The CAD remains generally range-bound against the USD and is getting little positive traction from gains in crude or commodities more generally (the CRB index is up more than 4% since the early August low). The CAD finds itself once again in the rather odd position of not correlating particularly well with any of the usual influences on the spot rate (commodities, stocks, volatility) and even though the CAD’s current correlation with short-term spreads is negative, we think the absolute level of the 2-year rate differential versus the USD (a premium of 87bps for Canadian short rates over the US, the highest in 6 months) will provide a firm cushion for the CAD. Domestic data releases pick up a little this week with the retail sales and CPI later in the week”, said research teams at TD Securities.
USD/CAD keeping to a tight range
They continued to say that, on the charts, near-term trends look neutral. There is no strong momentum either way for USD/CAD at present. “We think the market should see firm support on dips to the 1.0270/90 area while 1.0400/20 remains resistance”. USD/CAD is keeping with a tight range in the NA opening hours with the 20 dma 1.0324, 50 dma 1.0369 and the 200 dma is 1.0156. RSI (9) reads 49.34. Supports are ascending from 1.0150, 1.0170, 1.0245 and 1.0265. Spot is currently 1.0335 while resistances are 1.0370, 1.0405, 1.0430 and 1.0445.
“The CAD remains generally range-bound against the USD and is getting little positive traction from gains in crude or commodities more generally (the CRB index is up more than 4% since the early August low). The CAD finds itself once again in the rather odd position of not correlating particularly well with any of the usual influences on the spot rate (commodities, stocks, volatility) and even though the CAD’s current correlation with short-term spreads is negative, we think the absolute level of the 2-year rate differential versus the USD (a premium of 87bps for Canadian short rates over the US, the highest in 6 months) will provide a firm cushion for the CAD. Domestic data releases pick up a little this week with the retail sales and CPI later in the week”, said research teams at TD Securities.
USD/CAD keeping to a tight range
They continued to say that, on the charts, near-term trends look neutral. There is no strong momentum either way for USD/CAD at present. “We think the market should see firm support on dips to the 1.0270/90 area while 1.0400/20 remains resistance”. USD/CAD is keeping with a tight range in the NA opening hours with the 20 dma 1.0324, 50 dma 1.0369 and the 200 dma is 1.0156. RSI (9) reads 49.34. Supports are ascending from 1.0150, 1.0170, 1.0245 and 1.0265. Spot is currently 1.0335 while resistances are 1.0370, 1.0405, 1.0430 and 1.0445.