The market has been bearish and short CAD across the board for quite a few months and I for one think that we are due for a bigger correction. USD/CAD is currently in a sideways consolidation broadly between 1.0750/1.1000 and I expect this to eventually break lower towards 1.0300. GBP/CAD longs has been the trade of choice for many hedge funds in recent times but I can’t help feeling that too many joined in too late and that they are sitting long at the wrong levels.
The hourly chart in USD/CAD looks like it could easily move back towards 1.0930 but any rallies are selling opportunities in my biased view. I realise that it will take some sort of ‘shock’ or unexpected event to drive the CAD shorts out of the market, perhaps some unexpectedly positive Canadian data or the like.
