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22 May 2015
GBP/CAD sees ample room to the upside – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities see GBP/CAD as having ample room to move to upside, supported by strong UK fundamentals.
Key Quotes
“We think GBPCAD is the better cross to trade; not only has the pair put in some good work the upside already (we think 1.95 is a probable near-term target though wide Bollinger bands suggest we are vulnerable to a consolidation before reaching the next major level) but we think there is limited two-way risk and is “cleaner” or “purer” directional bet on CAD than versus the USD.”
“So we like GBPCAD higher on the expectation that the data disappoints, but we also think a buy-the-dip strategy may be just as effective. Note that the UK will also be on holiday on Monday so liquidity could be an issue and become thin rather quickly.”
“From a thematic point of view, we think GBPCAD has lots of room to run to the upside as UK fundamentals should strengthen (which mean BOE rate hike in early 2016 still seem like a good bet for now) while in Canada they should struggle more than the BoC estimates and should reintroduce an easing bias back into the front-end.”
Key Quotes
“We think GBPCAD is the better cross to trade; not only has the pair put in some good work the upside already (we think 1.95 is a probable near-term target though wide Bollinger bands suggest we are vulnerable to a consolidation before reaching the next major level) but we think there is limited two-way risk and is “cleaner” or “purer” directional bet on CAD than versus the USD.”
“So we like GBPCAD higher on the expectation that the data disappoints, but we also think a buy-the-dip strategy may be just as effective. Note that the UK will also be on holiday on Monday so liquidity could be an issue and become thin rather quickly.”
“From a thematic point of view, we think GBPCAD has lots of room to run to the upside as UK fundamentals should strengthen (which mean BOE rate hike in early 2016 still seem like a good bet for now) while in Canada they should struggle more than the BoC estimates and should reintroduce an easing bias back into the front-end.”