14 Jan 2014
Flash: USD/CAD 1.100 in sight - BMO Capital Markets
FXstreet.com (Barcelona) - Stephen Gallo, European Head of Currency Strategy at BMO Capital Markets notes that 1.100 in USD/CAD is firmly within striking distance.
Key Quotes
“We suspect that a stab will be taken at that level by the end of the week. At that point, we look for price action in the pair to become a bit more balanced. At 1.100, we think the immediate risks of a short squeeze higher in the CAD and another leg up in USD/CAD are a bit more balanced than in the 1.085-1.095 range.”
“We expect firm bids in place between 1.085 and 1.090 in the pair for the time being. With the Canadian data calendar pretty quiet this week, we’ll probably look to start fading the rallies in USD/CAD at 1.100 and higher for two reasons.”
“First, leveraged funds are currently about 80% max-short CAD following last week’s moves. Second, by the end of this week, we’ll be firmly within BoC event risk territory as regards the January 22nd monetary policy decision.”
“These factors should be acting as a cap on positioning and tolerance for risk by this time next week. The best opportunity for uninhibited CAD weakness prior to the BoC rate decision would therefore appear to be about now.”
Key Quotes
“We suspect that a stab will be taken at that level by the end of the week. At that point, we look for price action in the pair to become a bit more balanced. At 1.100, we think the immediate risks of a short squeeze higher in the CAD and another leg up in USD/CAD are a bit more balanced than in the 1.085-1.095 range.”
“We expect firm bids in place between 1.085 and 1.090 in the pair for the time being. With the Canadian data calendar pretty quiet this week, we’ll probably look to start fading the rallies in USD/CAD at 1.100 and higher for two reasons.”
“First, leveraged funds are currently about 80% max-short CAD following last week’s moves. Second, by the end of this week, we’ll be firmly within BoC event risk territory as regards the January 22nd monetary policy decision.”
“These factors should be acting as a cap on positioning and tolerance for risk by this time next week. The best opportunity for uninhibited CAD weakness prior to the BoC rate decision would therefore appear to be about now.”