Back
15 May 2015
USD/CAD expected to see 1.29 by September – SG
FXStreet (Barcelona) - The Societe Generale Team expects USD/CAD to consolidate near 1.20 in the short-term but drift higher towards 1.29 over the medium-term.
Key Quotes
“The rally in the CAD is driven by higher oil prices and USD weakness but more broadly a squeeze in global speculative positioning. The speculative market was long USD, equities, duration and short oil. USD/CAD was a good proxy for a while suggesting it may still have some leeway to fall.”
“Nonetheless, the technical picture in USD/CAD suggests prudence in short-term when betting on the downside.”
“After a few days, the squeeze in long USD positioning should peak. This should then see USD/CAD gently fade back higher as the liquidity stress unwinds leaving USD/CAD to consolidate above 1.20 this month.”
“Over the medium-term, we expect this positive drift in USD/CAD to continue heading for 1.29 in September. The outlook on oil is likely to prove less supportive while the probability of better US economic data should increase after a long series of negative surprises.”
Key Quotes
“The rally in the CAD is driven by higher oil prices and USD weakness but more broadly a squeeze in global speculative positioning. The speculative market was long USD, equities, duration and short oil. USD/CAD was a good proxy for a while suggesting it may still have some leeway to fall.”
“Nonetheless, the technical picture in USD/CAD suggests prudence in short-term when betting on the downside.”
“After a few days, the squeeze in long USD positioning should peak. This should then see USD/CAD gently fade back higher as the liquidity stress unwinds leaving USD/CAD to consolidate above 1.20 this month.”
“Over the medium-term, we expect this positive drift in USD/CAD to continue heading for 1.29 in September. The outlook on oil is likely to prove less supportive while the probability of better US economic data should increase after a long series of negative surprises.”