USD/CAD in tight range between weekly PP and 20-day SMA

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"If there is key factor to watch near-term for USDCAD, it may be the broader tone of fixed income markets and any movement in US-Canada spreads ." 
- TD Securities (based on FXStreet)


Pair's Outlook 
The US Dollar behaved in accordance with expectations last Friday. The 20-day SMA stopped the volatility to the upside, causing the USD/CAD pair to edge down. Moreover, the Greenback settled directly between 1.2050 and the weekly PP, as was foretold. On Monday, we expect the US currency to climb up, with gains limited around 1.2129, represented by the 20-day SMA. Meanwhile the pair is supported by the weekly PP, while trade is anchored around 1.21 psychological level. Technical studies, however, retain bearish signals in the daily timeframe, suggesting further weakness. 

Traders' Sentiment 
Bears keep growing in number, as 55% of all positions are short. Meanwhile, the purchase orders now take up 58% of the market.
© Dukascopy Bank SA

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