Canadian Dollar Forecasts: CAD Exchange Rates Outlook for April, May, June 2014: Sterling/CAD Heads Towards 1.92
- Written by: Gary Howes
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Canadian Dollar exchange rate forecasts for April, May and June 2014.
Canadian Dollar Forecasts 2014: The Canadian dollar is expected to see pressures continue to mount through the course of mid-2014. Many analysts do however see the CAD firming up towards the latter part of the year suggesting it is not all one-way traffic against the unit and any strength should be taken advantage of even if in a partial manner.
Analysts at TD Securities warn that losses against the pound sterling are particularly well-articulated by technical studies.
According to analyst Shaun Osborne, should a key resistance level be breached then a run to his near-term target should be rapid:
"GBPCAD retains a steady, grinding bid. We think it is hard to ignore what is going on here because 1) the GBP baulked at pushing significantly below the base of the 2014 consolidation range when it had the chance earlier in April and 2) trend momentum signals are once again bullishly aligned across the range of short, medium and long-term timeframes.
"That means limited downside risk and the likelihood of an ongoing grind higher in the weeks ahead. Gains through 1.8645 should see 1.92 (our long-held bull target) reached fairly quickly."
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Euro to Canadian dollar forecast for April through June: Evenly balanced
Concerning the euro / CAD exchange rate Osborne says the outlook is finely balanced:
"EURCAD’s technical outlook is delicately balanced at this point. Medium to long-term price signals still rather suggest to us that a broader top/reversal has been unfolding in the past few weeks.
"But the lack of any significant downside acceleration in the market and the EUR’s strong rebound from the low 1.50 area earlier in April suggest that there is still some life in this cross yet.
"Trend momentum has slowed to neutral though so we still rather think in terms of limited upside scope (while 1.5330 holds) and more downside risk (below 1.50) in the medium term."
US dollar to Canadian dollar forecast 2014 (Near to medium term)
The technical outlook for the Canadian dollar against the US dollar is meanwhile also seen as being bullishly aligned:
"The short-term trend still looks comfortably higher for funds, even with the market running into a clear road block above 1.1030 today—just below last week’s high in holiday-thinned trade.
"The rebound in funds from the early April low has slowed but we think the underlying dynamics at play here are still positive from a technical perspective.
"Last week, we wanted to see spot push through the low 1.10 area to support the impression of a base forming and to progress on to the upper 1.10 area. That has largely been achieved so higher volume trading through the balance of the week should see funds test 1.1060/70.
"USDCAD had a positive week overall last week, securing the firmer close we wanted to see to suggest a medium-term base was forming.
"Gains were hardly empathic though—a deeper rebound would have been a more convincing low/reversal signal—but we’ll take it. We think firm support is like around 1.0950 now. Gains through 1.1061 (40-day MA) will be a plus."
