ANZ Bank forecasts a potential upswing in the USD/CAD currency pair, eyeing an entry point at 1.36 with an anticipated movement towards 1.39. This outlook is based on expectations of a USD recovery, alongside several factors that could impact the Canadian Dollar (CAD) negatively.
USD Recovery Anticipated: ANZ projects a rebound in the USD for the coming week, which could positively influence the USD/CAD pair.
Vulnerability of Canadian Data: Canadian economic indicators such as CPI and retail sales, expected to be weaker next week, could exert downward pressure on the CAD.
Risk Sentiment Impact: Softer risk sentiment, particularly if coupled with a strengthening USD, is not conducive to CAD strength.
Oil Price Influence: The CAD, often correlated with oil prices, might face additional headwinds due to declining oil prices.
Targeted Trading Strategy: ANZ suggests a trading strategy of buying USD/CAD at 1.36, targeting a rise towards 1.39.
The combined effects of anticipated USD strength, potential weaknesses in Canadian economic data, softer risk sentiment, and falling oil prices present a buying opportunity in the USD/CAD pair. Investors and traders considering this strategy should monitor these key factors closely for any changes in market dynamics.