- National Australia Bank (based on Reuters)
The USD/CAD experienced serious volatility to the downside yesterday, but the overall exchange rate remained relatively unchanged. The pair reached a daily low of 1.2125, but ended up settling at 1.2225. Today technical studies suggest more weakness in the daily and the monthly timeframes; however, we still expect the US Dollar to regain some bullish momentum and, possibly, even reach the 1.23 major level again. The 1.23 is also bolstered by the monthly pivot point, which together should limit any gains.
Open positions broke out of the equilibrium, as 51% of traders now long the US Dollar. The portion of commands to acquire the Greenback, however, slid from 53 to 33%.