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"We've got uncertainty whether or not Canadian exports to the U.S. are going to rebound sharply over the next several months with this uncertainty over the government shutdown and the U.S. economic outlook. It makes sense the Canadian dollar would lag its commodity peers during an episode such as this. It will behave more like the U.S. dollar because of the close ties."
- HSBC Holdings Plc (based on Bloomberg)
Pair's Outlook
Pair is lowly eroding 1.035, which proved to be able to cause substantial short term sell offs. Only a close above 1.08 would uplift most of this pressure on the pair and would put 1.042 on the map. Failure at 1.035 would most certainly provoke a slippage below 1.03. In such case 1.023 and 1.018 would become main interim targets for the traders.
Traders' Sentiment
Loonie is one of the least bought major currencies at the moment. It is acquired only in 27% of all cases. Knowing this, it comes as no surprise that 73% of all open positions remain long on the pair. Distribution of pending orders increased in the bullish side. It is at 61% gauge, that is 2% more than yesterday.
© Dukascopy Bank SA