Flash: New cycle highs remain a strong possibility in USD/CAD - TD Securities

According to Shaun Osborne, Chief FX Strategist at TD Securities, “No real change in the short-term trend in USD/CAD with funds trading snugly up against channel support earlier in the day before rallying. With the USD, so far at least, maintaining the short-term bull trend, the oscillator studies on the 6-hour chart (above) remain in bullish territory and that means the studies remain in alignment on the short, medium and long-term timeframes—something we look for as confirmation of a sustainable trend. We look for a retest of the 1.04 zone soon and look for support in the low 1.03 area to hold. Buy USD dips remains the mantra.”

Osborne then went on to say, “the daily pattern of trade remains constructive. Trend studies are positively aligned for the USD across the hourly, daily and weekly charts, as we outlined above. This is a situation which typically gives us a lot of confidence in the durability of a trend and the likely ability of support points (in this case) to withstand counter-trend corrections. .

On a final note Osborne commented, “Last week’s dip from the high was a minor strike against the trend but the bullish position of the trend momentum indicators led us to conclude that USD/CAD losses were likely to remain limited. New cycle highs remain a strong possibility we think. we continue to look for solid support on dips (low 1.03 area) and for a push on to the 1.06 area in the weeks ahead. We expect USD/CAD gains to pick up a bit more momentum above 1.04. “