Analysts at Westpac are recommending to go long on USD/CAD pair at around 1.3180 levels, for the target price of 1.3365, while maintaining a stop loss of 1.3105.
Key Quotes
“Rationale:
- Bank of Canada Governor Poloz reiterated last week that the Bank expects to adjust policy up into neutral over time but accompanying language continues to muddy the waters on timing; Poloz adding that, “the path back to that neutral range is highly uncertain”. The BoC meets next week and markets may be inclined to price in risks of a BoC that follows other central banks with less hawkish signaling.
- President Trump’s jawboning of energy prices via twitter underscores the limit of OPEC’s ability to manage oil prices higher via production cuts. The so-called “NOPEC” bill moving through Congress will become more topical in coming weeks; the bill removes sovereign immunity to antitrust regulation, leaving OPEC producers exposed to possible antitrust violations. Past US administrations have repeatedly opposed the bill but Trump relishes breaking with predecessors and has regularly scolded OPEC.
- After a sharp move lower early in the new year USD/CAD has taken on a more consolidative tone lately.”
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