The Canadian Dollar was unable to rise despite a hawkish hike. What does it mean for USD/CAD?
Here is their view, courtesy of eFXdata:
TD Research discusses USD/CAD outlook and maintains a buy-on-dips strategy near 1.3050.
“This week brings plenty of data for the market to nibble – namely, CPI and retail sales. We look for headline CPI to inch higher to 2.3% y/y, which remains consistent with the negative real rate story. Retail sales should bounce back from a weather-induced slowdown in April, though the market is mostly expecting these outcomes,” TD notes.
“We look to buy into any USDCAD dips, looking to fade extremes in the 1.30 to 1.35 range. External drivers are also critical so US data, earnings, Powell and the broad USD matter too. USDCAD sits near HFFV and positioning seems to be leaning short so rather than chase the move higher we will look to re-establish fresh longs as we approach the bottom-end of the range near 1.3050,” TD advises.
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