17 Jun 2015
USD/CAD: Hawkish Fed might expose 1.2420 – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities give the outlook and expected price action for USD/CAD into the FOMC meeting, suggesting that there are two key approach to be followed – Fed statement and the dot-plots.
Key Quotes
“If a hawkish Fed …funds would bounce higher and 1.2370 looks to be key resistance. A breach above that would open upside potential to the 1.2420 area. As highlighted, it may be best to approach today’s FOMC meeting in two windows with the statement and dot-plot likely to show some cautious optimism that is initially USD positive but the 2:30 press conference—which should also solidify that policy liftoff will occur this year—will allow Yellen to nuance a low and slow message. While this may not be entirely USD negative it could limit the extent of the gains.”
“Our short-term fair value estimate for USDCAD is a tad lower at the moment and now stands at 1.2436.”
Key Quotes
“If a hawkish Fed …funds would bounce higher and 1.2370 looks to be key resistance. A breach above that would open upside potential to the 1.2420 area. As highlighted, it may be best to approach today’s FOMC meeting in two windows with the statement and dot-plot likely to show some cautious optimism that is initially USD positive but the 2:30 press conference—which should also solidify that policy liftoff will occur this year—will allow Yellen to nuance a low and slow message. While this may not be entirely USD negative it could limit the extent of the gains.”
“Our short-term fair value estimate for USDCAD is a tad lower at the moment and now stands at 1.2436.”