High conviction trade: Go long USDCAD – Westpac

By FXStreet FXStreet (Delhi) – Research Team at Westpac, suggest that go long in USD/CAD from 1.3238 (stop at 1.3100) as their process remains bullish USD/CAD even as the price action in the immediate wake of the FOMC saw our position exited.

Key Quotes

“We re-enter USD/CAD longs at 1.3238. USD/CAD’s uptrend may have stalled in the last month but by the same token, and perhaps tellingly, CAD has failed to capitalise on what has been a notable bounce in energy prices (WTI +19% from its late Aug lows), a stabilisation in the local data flow and Poloz’ more upbeat take on the Canadian outlook.”

“These improved atmospherics are not sustainable in any case. Growth prospects remain challenged by the ongoing terms of trade shock, fiscal restraint and a lack of progress in non-commodity exports. The BoC’s forecast for 2% annualised growth in H2 looks decidedly optimistic and the Bank could be forced back into action by their 2 Dec meeting and certainly no later than the end of Q1 2016. 1.35 still the target before the year is out.”
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Source:: FX Street