Bank of America Global Research discusses USD/CAD technical outlook and adopts a sell-on-rallies bias through Q2.
"We previously discussed a bias to fade USDCAD rallies in the 1.29s as wave 5 of the pattern was estimated to complete there. On March 8 spot traded to 1.2901 and turned lower. We weren't quick enough to get short before the turn but since then the market has been chasing it lower. The 200d SMA and trend line are broken and a bearish continuation pattern confirmed. We continue to like fading USDCAD rallies for downside in Q2," BofA notes.
"Since 1999, USDCAD was down in April 17 of 23 times or 74% of the time, lacked seasonal trend in May and was down in June 15 of 23 times or 65% of the time. In Q2, USDCAD was down 16 of 23 times or 70% of the time. CAD was also strong against NOK, JPY and MXN in Q2," BofA adds.
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