5 Nov 2013
USD/CAD dips find buyers circa 1.04, watch massive option
FXstreet.com (Barcelona) - USD/CAD continues to be bought on weakness, as Monday's retracement towards the 20-day MA just below 1.04 saw buyers coming in to send the price back to its Friday's NY close and forming a daily bullish pin bar in the process.
USD/CAD technical perspective
From a technical perspective, the run higher off 1.0275 support saw price top out at 1.05 handle before a combination of profit taking, bids drying up, some selling interest, led to a retracement, still very much seen as corrective in nature as price failed to close below the 38.2% fibonacci retracement from the 1.0275/1.05 bull run. In order to allow further upside, buyers should regain 1.0450 (Oct 25 high) ahead of a retest towards 1.05, with break higher exposing August highs at 1.0550+.
Massive option in USD/CAD rolling off at 1.05
There are huge options in USD/CAD rolling off at 1.05, notes Adam Button, Lead-US Editor at Forexlive: "A whopping $3.4 billion in notional USD/CAD options expires Tuesday at 1.05 at 10 am New York time. There is also a huge $3 billion strike at 1.1000 - largest since at least February (before that it’s hard to get good data)."
From a fundamental perspective, Button thinks that "the best reason for USD/CAD longs is the obscene spread between WTI and Canadian benchmark Western Canada Select as it hit $40 today and is $2.50 away from the widest on record."
USD/CAD technical perspective
From a technical perspective, the run higher off 1.0275 support saw price top out at 1.05 handle before a combination of profit taking, bids drying up, some selling interest, led to a retracement, still very much seen as corrective in nature as price failed to close below the 38.2% fibonacci retracement from the 1.0275/1.05 bull run. In order to allow further upside, buyers should regain 1.0450 (Oct 25 high) ahead of a retest towards 1.05, with break higher exposing August highs at 1.0550+.
Massive option in USD/CAD rolling off at 1.05
There are huge options in USD/CAD rolling off at 1.05, notes Adam Button, Lead-US Editor at Forexlive: "A whopping $3.4 billion in notional USD/CAD options expires Tuesday at 1.05 at 10 am New York time. There is also a huge $3 billion strike at 1.1000 - largest since at least February (before that it’s hard to get good data)."
From a fundamental perspective, Button thinks that "the best reason for USD/CAD longs is the obscene spread between WTI and Canadian benchmark Western Canada Select as it hit $40 today and is $2.50 away from the widest on record."