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"The Fed did decide to taper, but the amount was minimal and we have yet to see what the policy outlook will be going forward. Some bets on dollar gains are being unwound into year-end. The dollar is being sold across the board."
- FX Prime Corp. (based on CNBC)
Pair's Outlook
While being underpinned by the rising support line, USD/CAD continues to grind higher. The next challenge for the up-trend is likely to be a cluster of 2010 highs and the monthly R1 at 1.0701/1.0693, which has already prevented several attempts of the U.S. Dollar to rise beyond it since the beginning of December. A close above this level will open up a path towards 1.0923.
Traders' Sentiment
The difference between the longs and shorts remains significantly below the 10-day average of 40% - at 28%, which reflects growing concerns of the market regarding the ability of the U.S. Dollar to gain value further. Still, within 50 pips from the spot 60% of orders are to purchase the greenback.
© Dukascopy Bank SA