Forex Flash: CAD looks positive ahead – Wells Fargo
FXstreet.com (Barcelona) - Nick Bennenbroek, Head of Currency Research at Wells Fargo has maintained his positive outlook for the Canadian Dollar.
He feels that while overall economic growth and inflation are subdued for now, labor market trends have been more encouraging and the Bank of Canada has maintained a tightening bias. Technicals are favourable and FX positioning is extended but not extreme, providing scope for Canadian dollar strength as the global environment improves.
From a technical perspective, Bennenbroek notes that the 20 d MA has crossed below the 50 and RSI is neutral at 43. However, other momentum indicators suggest that a near term low has been reached. He continues to explain that, "Immediate support is at CAD0.9825 (recent low), followed by CAD0.9736 (October low), and CAD0.9633 (September low). Resistance is at CAD0.9882 (recent high), CAD0.9955 (early December high), CAD0.9990 (200-day MA), and CAD1.0057 (November high). Down trend resistance since June is also at CAD0.9982."
He feels that while overall economic growth and inflation are subdued for now, labor market trends have been more encouraging and the Bank of Canada has maintained a tightening bias. Technicals are favourable and FX positioning is extended but not extreme, providing scope for Canadian dollar strength as the global environment improves.
From a technical perspective, Bennenbroek notes that the 20 d MA has crossed below the 50 and RSI is neutral at 43. However, other momentum indicators suggest that a near term low has been reached. He continues to explain that, "Immediate support is at CAD0.9825 (recent low), followed by CAD0.9736 (October low), and CAD0.9633 (September low). Resistance is at CAD0.9882 (recent high), CAD0.9955 (early December high), CAD0.9990 (200-day MA), and CAD1.0057 (November high). Down trend resistance since June is also at CAD0.9982."
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