USD/CAD: Buying dips to aim for 1.28 (TD Securities)

Strategists at TD Securities believe that retracements of the USD/CAD pair are buying opportunities that are ideal for targeting 1.2800 in the medium term.

"In the absence of a change in tone by the BoC, we see few things in the way of a rebound of the USD/CAD pair".

"Governor Poloz's optimism seems to have been fully taken into account by the market, so it is difficult to be more optimistic, but given the stronger signs of supply during the night, USD/CAD may be subject to a step back".

"Our daily model suggests that USD/CAD is trading near a standard deviation that is above the equilibrium around 1.2270, but with the focus on the takeoff of the USD/JPY pair and firmness of dollar purchases, we believe that any dip should be bought (we are targeting USD/CAD at 1.28 in the coming months)".