9 Jul 2013
USD/CAD range bound for now
FXstreet.com (London) - USD/CAD has kept in a tight range since the YoY June Canadian Housing starts.
The data came better than the consensus, but this is only second tier ahead of Fed minutes tomorrow. The data read 199.6K against a consensus of 187k. USD/CAD is range bound between support 1.0530/40 and 1.0580 after a bout of profit taking earlier on after reaching 1.0600 last week. The market is waiting for the BoC meeting on 17th July against a back drop of a sluggish economy overall, and especially a softer business climate reported in yesterdays surveys.
Firmer US yields and Cad technical upside
Research Teams at TD Securities note that the US 10-year bond has picked up around 100bps since the start of May and narrower short-term spreads (2-year Canada-US spreads are starting to narrow again after widening 20bps between April and the end of June) should limit scope for USD weakness near-term. They look for consolidation in funds after the run up to 1.0600 and they think USD/CAD corrective losses should be limited to the high 1.0400/low 1.0500 area for now. “Intraday price trends show USD/CAD pressing the upper ranges of the short-term bear channel/potential bull flag hourly chart. We should see resistance at 1.0565 this morning but a push above there should see spot regain 1.0600 pretty quickly.”
The data came better than the consensus, but this is only second tier ahead of Fed minutes tomorrow. The data read 199.6K against a consensus of 187k. USD/CAD is range bound between support 1.0530/40 and 1.0580 after a bout of profit taking earlier on after reaching 1.0600 last week. The market is waiting for the BoC meeting on 17th July against a back drop of a sluggish economy overall, and especially a softer business climate reported in yesterdays surveys.
Firmer US yields and Cad technical upside
Research Teams at TD Securities note that the US 10-year bond has picked up around 100bps since the start of May and narrower short-term spreads (2-year Canada-US spreads are starting to narrow again after widening 20bps between April and the end of June) should limit scope for USD weakness near-term. They look for consolidation in funds after the run up to 1.0600 and they think USD/CAD corrective losses should be limited to the high 1.0400/low 1.0500 area for now. “Intraday price trends show USD/CAD pressing the upper ranges of the short-term bear channel/potential bull flag hourly chart. We should see resistance at 1.0565 this morning but a push above there should see spot regain 1.0600 pretty quickly.”