USD/CAD Fails at Weekly PP

USD/CAD Fails at Weekly PP

"In our view, that pace of accumulation is not sustainable going forward and as a result, we expect foreign direct investment and trade flows to be more important determinants than foreign central bank purchases in driving the Canadian dollar in 2014." - National Bank Financial (based on The Financial Post)

Pair's Outlook

Pair seemed to have stabilized after a brutal sell off before the new years eve, but received additional bearish impetus from the weekly PP today and has dipped below the 1.06 mark. We expect it to stabilize here as we see strong support at 1.0566/32 area. In case of an unexpected rally the pair might peak above the 1.07, but it seems very unlikely at the moment.

Traders' Sentiment

Short traders strengthened their presence in the market substantially - at the moment they account for 46%, in comparison to 40% yesterday, of market participants. Most of this change seem to be coming from triggering of pending orders as short side contracted by 30-40% depending on the range we look in to.