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31 Dec 2014
USD/CAD vulnerable, upside risks towards 1.1674 levels – Scotiabank
FXStreet (Barcelona) - Eric Theoret, CFA, CMT, Currency Strategist at Scotiabank, explains that the divergence from oil prices raises vulnerability in USD/CAD, raising risks for a push upwards towards 1.1674 levels.
Key Quotes
“USDCAD has made a decisive break below 1.1600 for the first time in two weeks, breaching a supportive trend line that had been in place since mid-December.”
“The divergence from oil prices is notable , leaving USDCAD vulnerable and raising the risk of a swift adjustment that could potentially push USDCAD back up to its December 15 high 1.1674 in the absence of a recovery in oil.”
“We note that the risk of adjustment is somewhat offset by the fact that USDCAD is moving in tandem with other measures, including options prices and the 2Y U.S.—Canada yield spread.”
Key Quotes
“USDCAD has made a decisive break below 1.1600 for the first time in two weeks, breaching a supportive trend line that had been in place since mid-December.”
“The divergence from oil prices is notable , leaving USDCAD vulnerable and raising the risk of a swift adjustment that could potentially push USDCAD back up to its December 15 high 1.1674 in the absence of a recovery in oil.”
“We note that the risk of adjustment is somewhat offset by the fact that USDCAD is moving in tandem with other measures, including options prices and the 2Y U.S.—Canada yield spread.”