USD/CAD plunges below 1.08

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"It emboldens the market participants that are already long the Canadian dollar to add to those positions. You cannot have a credible central bank cutting interest rates while CPI is rising."
- Bank of Montreal (based on Bloomberg)


Pair's Outlook
The U.S. Dollar has prolonged its last week's retreat against the Canadian peer, today it slid beneath the major level at 1.08 and also below the monthly S1 at 1.0772. However, it is worth mentioning that today's drop was mainly caused by informational shock. We expect the buck to recover gradually, though in short term it could even touch the 1.07 level. Although, it is unlikely the greenback will dip below 1.07 as it is well-supported with the monthly S2.

Traders' Sentiment
Current decline is apparently not discouraging the traders; as compared to the yesterday's readings, the share of long positions rose from 72% to 73%. At the same time the buy orders increased significantly to 90%.
© Dukascopy Bank SA

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