Forex Flash: USD/CAD aloof to European and Japanese verbal intervention - TD Securities

FXstreet.com (Barcelona) - TD Securities analysts say the CAD trades very much aloof to the rising tide of "verbal intervention" from various officials (European and Japanese essentially), remaining essentially range bound against the USD. "The offered tone to Asian and European equities has added support to the safe-havens and left the commodity bloc as relative under-performers on the session", wrote analysts Shaun Osborne and Greg Moore, eyeing these developments as FX/risk correlations may be strengthening again (the CAD has retained one of the tightest correlations with stocks anyway over the past few weeks) and the S&P 500 is still struggling to beat the recent peaks around 1475. "A correction lower in US stocks seems more likely to spill over into FX (giving the USD a bit of a lift and undercutting the CAD) now than around the turn of the year when the USD's correlation with equities was near zero", they added, observing a slow progressing upside on the USDCADO chart, with resistance at the upper 0.98 area. "Weak trend momentum in the short run suggests that, absent a catalyst USDCAD gains will remain limited", they concluded.