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"On a day when equities are taking it on the chin, rates are probably going to stay better bid and the U.S. dollar will strengthen against the Canadian dollar as a result."
- Royal Bank of Canada (based on Bloomberg Businessweek)Pair's Outlook
It seems that even probability of bearish dip predicted by weekly technical indicators becomes more realistic, as pair experienced a 75-pip plunge after briefly advancing above 0.9830. However, it is more likely that the real resistance lies at 0.9800 and the pair managed to advance higher with the help of momentum traders. As it has been happening lately, it is likely that the pair will pare some of its losses after dropping closer to 0.9736.
Traders' Sentiment
For more than a week 70 or more per cent of traders have been holding long positions on the pair (74% today). Distribution of pending orders does not predict any changes, as 58% (+3% from yesterday) of pending orders on the pair are to buy the U.S. Dollar.
© Dukascopy Bank SA