26 Mar 2014
AUD/CAD: Further gains expected - Westpac
FXStreet (Bali) - As Westpac notes, the up trend in AUD/CAD has turned more accentuated amid the divergence in monetary polices between a neutral RBA and a dovish BoC.
Key Quotes
"Australia’s much closer trade ties to China suggest at least some consolidation in coming weeks as Chinese growth struggles to find a base. Lopsided spec short CAD positions could also be reduced, seeing the pair pull back to 1.01. But further out, AUD/CAD could easily return to the 1.05-1.06 region."
"Last week’s close was the first to truly exceed the major pivot point around parity. A clean break of a level of such significance is a notable event and keeps us focused on further gains. ADX is upward sloping, reminding us that this is a trending environment. 1.0280/90 has the potential to be a level of resistance in the near term, if AUD/CAD is to trade in an uptrend channel. I would expect to see this level tested in the near term. Above 1.03 the upside opens up substantially and targets around 1.06/1.07 come into play."
Key Quotes
"Australia’s much closer trade ties to China suggest at least some consolidation in coming weeks as Chinese growth struggles to find a base. Lopsided spec short CAD positions could also be reduced, seeing the pair pull back to 1.01. But further out, AUD/CAD could easily return to the 1.05-1.06 region."
"Last week’s close was the first to truly exceed the major pivot point around parity. A clean break of a level of such significance is a notable event and keeps us focused on further gains. ADX is upward sloping, reminding us that this is a trending environment. 1.0280/90 has the potential to be a level of resistance in the near term, if AUD/CAD is to trade in an uptrend channel. I would expect to see this level tested in the near term. Above 1.03 the upside opens up substantially and targets around 1.06/1.07 come into play."