TD remains bearish on USD/CAD, forecasting it to 1.20 ahead, but in the very near term think its a sell on rallies toward 1.26

Citing:

  • its oil links are overdone
  • positioning is crowded,
  • too much optimism on local drivers
  • BoC has turned more hawkish but need to monitor if the Bank follows through on its guidance in the months ahead

Thus the reward to risk for long CAD is skewed “poorly” in the short term:

  • unlikely that CAD will break higher against the USD at current levels

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The chart looks heavy (daily candles):

TD remains bearish on USD/CAD, forecasting it to 1.20 ahead, but in the very near term think its a sell on rallies toward 1.26

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