USD/CAD Trapped in a Neutral 0.9724 – 1.0343 Trading Range
Active “Layered” hedging strategy - Sellers of USD/CAD should focus on resistance at 1.0235, 1.0343. A 3-month cable car option could also be incorporated into this strategy.
Disciplined “layered” hedging strategy - Buyers of USD/CAD should focus on support at 0.9895, 0.9724 and 0.9422. In addition, a 3-month enhanced forward could be considered for this strategy.
- USD/CAD is trapped in a 0.9724 – 1.0343 trading range that has produced a neutral trend bias from a technical perspective.
- A global economic slowdown is continue to be viewed as main concern for the Canadian dollar.
- A marked slowdown in economic growth should be accompanied by a correction lower in commodity prices. This would be another negative factor for the CAD.
- Current price action is viewed as a “base-building” process from a technical perspective.
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