USD/CAD: Disappointing price action - Westpac

Richard Franulovich, Research Analyst at Westpac, suggests that its been disappointing price action in USD/CAD as the pair fully unwinding losses triggered by the BoC’s recent hawkish pivot.

Key Quotes

“Crude oil’s slide, now approaching 12% below its mid-May highs, is evidently proving too hard to resist.”

“Still inclined to sell USD/CAD on strength. For one, spec shorts remain at all-time historic highs, around 100k.”

“The BoC remains a long way from removing stimulus but the hawkish pivot  should still nevertheless inoculate CAD somewhat from multiple threats including Trump NAFTA renegotiation risk and the vagaries of the oil market.”

“USD/CAD a sell into 1.36/1.37, EUR/CAD and AUD/CAD a sell at current levels (1.52 and 1.02 respectively).”