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The Canadian dollar was pushed higher by rising oil prices but held back by worries about the Canadian economy. What’s next?

Here is their view, courtesy of eFXnews:

TD FX Strategy Research discusses USD/CAD outlook in light of the downside surprise in Canada’s retail sales report this week.

“In spite of the deceleration in data surprises in the past three months, the consensus expectations of Canadian growth has continued to inch higher.  We suspect the market is likely to give CAD a pass on the retail sales print  if oil continues to push higher ahead of next week’s OPEC meeting and GDP confirms that the economy continues to best the BoC’s growth forecasts.

A near-term break of 1.2675 would confirm the downtrend remains intact, leaving us holding shorts*,” TD argues.

TD maintains a short USD/CAD* from 1.2770 targeting 1.2380.

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