USD/CAD: another growth setback

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"The most important event this week is the Bank of Canada's policy rate decision. Financial markets are evenly split between no change and a 25bp cut to 0.50%. With the economy arguably in recession and no rebound in sight, we think there is a very strong chance of a cut."
- Capital Economics (based on WBP Online)


Pair's Outlook 
The Greenback overperformed on Monday, as it advanced further than anticipated versus its Canadian counterpart. Moreover, the USD/CAD almost reached the weekly R1 at 1.2796, but, nonetheless, still stabilised at a three-month high. Losses are likely to occur today, although we will doubtfully see a gradual decline, as the US Dollar remains strong after the Greek bailout deal. The nearest support rests only at 1.2679, while technical indicators retain their distinctly bullish signals, unable to confirm the bearish scenario.

Traders' Sentiment 
Bears keep gaining more ground, as 73% of traders now hold short positions. The share of orders to buy the US currency lost 19% percentage points, now accounting for 36% of the market.
© Dukascopy Bank SA

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