CAD on the defensive, AUD had legs – BBH

Research Team at BBH, suggests that weak economic data, the drop in oil prices, and the prospect of a Fed hike has kept the Canadian dollar on the defensive since the middle of August. 

Key Quotes

“The US dollar approached the CAD1.3150 area before pulling back before the weekend.  The US dollar initially sold below CAD1.30; it quick met new buyers.  To signify anything important, the US dollar would need to be sold below CAD1.2980.  In lieu of that, the greenback can return to the CAD1.3100-CAD1.3140 area.

The Australian dollar looked like it had legs.  After the US jobs data, it spiked to $0.7615 from around $0.7545.  It stopped short of the 20-day moving average (~$0.7620), which also corresponds to the 50% retracement of the Aussie's erosion since $0.7750 was approached in mid-August.  Support is seen in the $0.7490-$0.7500 area.  A break would open the door toward $0.7400.”