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"What you've seen so far is actually a very muted response to the beginning of tapering, and that has prompted a lot of investors that were already short the Canadian dollar to trim some of those positions."
- BMO Capital Markets (based on Reuters)
Pair's Outlook
For the time being the up-trend at 1.0609 copes with the selling pressure, meaning the currency pair may still launch yet another attack on the 2010 highs at 1.0701/1.0693. In case this important resistance gives in, USD/CAD will most likely maintain the bullish course until it encounters the long-term (connects peaks since September of 2012) resistance line at 1.0923.
Traders' Sentiment
The positive with respect to USD/CAD sentiment continues to subside. The advantage of long positions over the short ones further contracted and now amounts to 28% percentage points, although it is enough the say that the market still sees this pair as strongly bullish.
© Dukascopy Bank SA