CIBC Research discusses USD/CAD tactical view in the near-term and strategic view in the long-term.
"Tactical View: We’ve likely entered a new consolidative range for the pair (1.30001.3350), and we’re against establishing fresh shorts here.
Strategic View: USD/CAD will move higher in the coming quarters as the CAD goes back to being a high beta play on the US economy. Our target is above 1.40 in H2 2020," CIBC notes.
"Consolidation is different than an extension lower. The policy picture doesn’t endorse shorting the pair. Why would you short USD/CAD when the market has the Fed priced for two cuts by next June, but very little for the Bank of Canada in that same timeframe? This extension lower is being driven by broad USD weakness as opposed to endogenous CAD strength alone. That makes it difficult to short the pair strategically," CIBC adds.