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"We see any volatility around the FOMC as a buying opportunity on the dollar."
- Morgan Stanley (based on CNBC)
Pair's Outlook
Just like AUD/USD the Dollar-Loonie pair also refused to respect the borders implied by the channel, in this case of an upward one. The price fell through the up-trend, and right now it is testing a dense demand area between 1.3163 and 1.3136. Among others this support zone includes the monthly PP and 55-day SMA, hence we expect a pullback to 1.3250 before the decline is resumed. If 1.3150 is out of the way, the first target will be the monthly S1 at 1.2950.
Traders' Sentiment
A breakout to the downside apparently encouraged even more bears to enter the market. The share of short positions increased by four percentage points to 75%. In the meantime, 59% of pending orders are set to sell the US Dollar against its Canadian peer.
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