USD/CAD: Air Pocket Into 1.2130 But Some Profit-Taking On Shorts First

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Dollar/CAD is trading under 1.24 ahead of the BOC decision. The team at TD sees a big air pocket on the way down.

Here is their view, courtesy of eFXnews:

TD FX Strategy Research notes that the focus this week for CAD traders shifts from data to policy, with the BoC meeting Wednesday.

“We believe that the Bank will hold its powder dry but look for it to deliver a hawkish hold, signaling another hike next month and room for more next year.

The break of the recent lows now opens up some air pockets to 1.213. Still, given the rapid adjustment in Canadian rates and our view that the BoC remains onhold, we look for some profit taking first,” TD argues. 

“We are also cautious about the possible drag a 10% CAD appreciation will have on inflation, which favors hiking next month. Even so, the upbeat growth momentum and softer USD backdrop should continue to favor selling into USDCAD rallies.

We look to get short USDCAD on moves back towards 1.26,” TD advises.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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