TD FX Strategy Research discusses USD/CAD outlook, and notes that the pair has marched higher following yesterday's BoC statement which was more dovish than expected, injecting a new level of cautiousness despite the improvement in the data.
"We believe this BoC outlook provides a snapshot of the current state of affairs rather than a forward-looking assessment. Even so, the injection of renewed BoC cautiousness (Poloz likely to emphasize it again next week) leaves a murky (doubtful) path for January.
For now, USDCAD looks confined to a tight trading range with the data still arguing to fade topside ahead of 1.29, but downside momentum capped around 1.26 in the short-run," TD argues.
In line with this view, TD maintains a short USD/CAD position* from 1.2770 targeting 1.2380, with a stop at 1.2960. Copy signals, Trade and Earn $ on Share4you - https://www.share4you.com/en/?affid=0fd9105