Loonie looking beyond Parity

USD/CAD continues to hover just above parity in this questionable “risk on” back drop. Some analysts are calling for a .9800 print short term. So far this morning the CAD is supported by a positive read from the US ADP labor number (+163k). Another positive read on US ISM could provide for a stronger move for the interest rate commodity sensitive currency. You can even include any hint of action by the Fed this afternoon to provide further support for a higher CAD print. Dealers currently defend either side of parity because of optioned related interest. However just below the first wave of buying USD stop losses are beginning to appear. Key levels remain parity, .9980, .9930 & .9800 while 1.0040, 1.0110, 1.0175 & 1.0225 are resistance points above.

For those who have missed the boat the bulk of the sell orders appear between parity and 1.0100

Some initial interest to buy below parity but that interest quickly tapers off.

The largest portion of short sellers have only just entered these positions above 1.0020-50

Retail customers are overweight long USD and with a small percentage only will to exit below. If anything it seems that some want to add to their short CAD position.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell