Canadian Dollar (CAD) Forecasts: Remain Firm vs GBP, EUR and USD Likely to Persist

TD Securities who have issued their latest forecasts for the Canadian dollar (CAD) against the US dollar, euro and British pound.

In this article we take a look at where the CAD is headed next against the pound sterling, euro and US dollar.

Against all three we note that it is in fact the Canadian dollar which is tipped to maintain the upper hand as we move forward.

For your reference, the following spot CAD rates are noted at the time of update:

• The British pound to Canadian dollar (GBP/CAD) is at 1.8050.
• The euro to Canadian dollar (EUR/CAD) is at 1.4144.
• The US dollar to Canadian dollar (USD/CAD) is at 1.1281.

Be aware that the above levels are from the inter-bank markets - your bank will affix a spread at their discretion when passing on a retail rate. However, an independent provider will seek to undercut your bank, thereby delivering up to 5% more FX in some instances. Please find out more.

Turning to the technical picture we see a story told within which the Canadian dollar is likely to maintain the upper tone against the trio of USD, EUR and GBP.

Pound to Canadian Dollar Forecast

Shaun Osborne at TD Securities admits he is still struggling to form a stronger opinion on the GBPCAD outlook beyond the broader generalisation of a choppy range trade:

"The GBP looks heavy near-term below short-term trend/channel support but the pound is trading well off the intraday low so far amid the usual lack of follow through and trend momentum is weak (albeit ticking up a little more negatively now,).

"Downside risks may be building a little more here but unless or until GBPCAD gets well above 1.82 or below 1.78 (and even then, considering the big rally from early September), we rather think range trading continues."

US Dollar to Canadian Dollar Forecast

According to Osborne the outlook for USD/CAD is a tricky one to call at the present time:

"Short and medium-term charts are flashing some contradictory signals again for USDCAD. On the one hand, funds continues to track lower in a well-defined short-term channel, supported by negative, if weak, trend momentum. But the rebound in the USD so far today leaves the USD trading uncomfortably close to top of the channel (potential bull flag) at 1.1213. Above here and USDCAD should run on to the 1.13 area again fairly quickly.

"We are a bit more inclined to look at developments a little more positively for the USD today, if only because the market responded well to noted support in the low 1.11 area yesterday."

Euro to Canadian Dollar Forecast

EURCAD also retains a heavy tone.

The EUR’s rejection of 1.4400/20 levels suggests an inherent underlying weakness in the cross, as does the developing consolidation between resistance above 1.44 and short-term trend support at 1.42055.

"We are inclined to look for a little more softness near-term; the base of the short-term consolidation may give way to renewed weakness on a sustained move below 1.42 (we had been long-term advocates of a push to the 1.35/1.38 range before the October rally—apparently derailed the downside push in the cross)."