TD Research discusses the latest reading from its high-frequency fair-value models 'HFFV'. TD is long USD/CAD from 1.2970 as its ToTW* this week targeting a move towards 1.3150.
"We note that our dashboard implies a bit of a lopsided trade across the G10 right now. The USD screens both cheap and oversold based on our HFFV and short-term positioning gauges. USD short positioning against its G9 peers sits roughly in the 78th percentile of the 3y range. It also screens about 0.75% cheap on HFFV, underscoring the prospects of short-term consolidation," TD notes.
"On these metrics, CHF, NOK, GBP, and CAD look the most expensive. Our TOTW emphasizes the CAD angle, reflecting the shift in our MRSI ranking, Canadian event risk this week, and the weak correlation of oil prices to the Canadian economy," TD adds.
*Recorded in eFXplus Orders