Forex Flash: USD/CAD risk is two-fold – TD Securities

FXstreet.com (Barcelona) - Risk is two-fold for the CAD: "Firstly, the USD benefits from safe-haven flows (while the CAD does the opposite, as it retains one of the stronger positive correlations with US stocks among its high beta peers", wrote TD Securities analysts, that continued, "secondly, the CAD may suffer from a slower domestic growth outlook as weaker US economic prospects from hitting the cliff will quickly spill north".

Technically speaking, significant change in the short/medium term trend in funds is already playing out, with a reversal from the low 0.98 area in mid-December setting an interim low for the market and, having pushed through the top of the Nov/Dec consolidation channel. "We think the main risk for the market is geared towards a repeat of the Sep/Nov rally in funds (ie a move to 1.03)", wrote analysts Shaun Osborne and Greg Moore, pointing to the 40-day MA (0.9941) as close support, and the 0.99885/05 zone as key for the bull scenario. Buys on dips are advised.