TD Research discusses USD/CAD outlook and sees a scope for consolidation in the near-term before shooting to 1.45-1.47 range over the coming weeks.
"Tactically, we think USDCAD could start to consolidate lower in the 1.40/1.4330 area as wholesale policy efforts, should over time, alleviate panic. While these extraordinary circumstances can dampen the informational value of proxy indicators, we nonetheless note that our positioning metrics suggest that CAD shorts have neared 2008 and 2016 extremes," TD notes.
"But, we reckon that as data becomes more available over the next several weeks, USDCAD will eventually need to adjust higher to reflect the new growth reality/outlook. This puts a re-test of the 1.45/47 ranges observed in 2016 as inevitable as the oil shock compound CAD's woes and USD funding issues persist," TD adds.