Canadian Dollar Saved By Surprise BoC Hold, Can CPI Follow Through?
The Canadian dollar was riding high fundamental waves this past week and looks to do so again this week. However, despite receiving some of the currency’s top market movers this past week – and dramatic volatility – USDCAD ended the session within the bounds of its wide 1.0350 – 0.97 range once again. On the other hand, while the pair has held below substantial resistance, pressure has clearly built up for a potential breakout. Crude oil has eased off its record highs, the outlook for monetary policy and economic conditions is beginning to favor the still undervalued US, and the retail speculative trader is betting heavily on maintained range conditions. This past week, the FXCM Speculative Sentiment Indicator reported the highest concentration of short USDCAD positions in 18 months as retail traders believed they were looking at an easy range trade. However, retail traders are often on the wrong side of the market due to their inexperience and a trading style that is more akin to gamb
