CANADA: USDCAD Sensitive To Upside Surprise From CAD CPI
Oct-14 17:07
- USDCAD has extended Friday’s net increase today but struggled to push through 1.3800 with either side of the cross out for Columbus/Thanksgiving holidays.
- The session high of 1.3801 has nevertheless extended a strong run of daily gains, and opens a new resistance level at 1.3822 (76.4% retrace of Aug 5 – Sep 25 bear leg). To the downside sits 1.3696 (Oct 10 low) before 1.3605 (20-day EMA).
- The pair has pushed it into overbought territory again, in what has been a continuation of large swings in recent months having been overbought in late July and oversold in late August.
- For a rough indication, latest CFTC futures positioning a further build in CAD net shorts last week to 40% of open interest. That’s a five consecutive weekly build from 27% in early September as it shifts back closer to historically large net shorts of 56% in late July/mid-August.
- This technical and positioning backdrop could leave CAD more sensitive to an upside surprise from tomorrow’s CPI release – see preview in the post above.
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