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"I think the trend is U.S. dollar strengthening, CAD weakening off into next year, but I think the bumpy pattern over the next few weeks is going to take a little bit of the strength out of the U.S. dollar if the Fed doesn't taper in September."
- Derek Holt, Scotiabank (based on Reuters)
Pair's Outlook
USD/CAD has effortlessly pierced through the weekly R2 and R3 levels and it is now approaching the monthly R1 at 1.0512, which represents a significantly tougher resistance than the previous two. Nevertheless, even after a likely pull-back, the buck is expected to resume the advancement and force its way through the obstacles, towards a two-year high at 1.0608.
Traders' Sentiment
SWFX traders do not seem to be willing to take profits just yet, anticipating even higher trading levels in the future, this is derived from the fact that the percentage of long positions held went up to 75% at the time when USD/CAD was on the rise. Among the pending buy (54%) and sell (46%) orders the gap is substantially smaller.
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