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Forex Flash: USD/CAD tracking price action elsewhere - BMO Capital Markets

FXstreet.com (Barcelona) - Stephen Gallo, European Head of FX Strategy at BMO Capital Markets notes that USD/CAD is trading a little higher today, pretty much tracking the moves in other currency pairs.

On the cross rates he notes that Canada still looks to be performing pretty well, and he still prefer to trade Cad/Jpy from the long side, and look to sell rallies in AUD/CAD. In straight Funds it looks like another slow range bound type day. Further, he expects to see good demand and support on any pull back to 1.0140/50, the level which broke yesterday and accelerated buying. He adds that Corporate offers are likely to emerge around 1.0200/1.0225 and should slow the move higher. Gallo writes, “The move over the last few days really has not been a Canada story, but more a reflection of USD strength elsewhere but it does feel like sentiment has shifted to a buy the dips mentality for the short term at least. Some second tier data releases today, but the main focus this week will be Friday’s CPI data for April.” Elsewhere, he notes that EUR/USD took a hit early in the London session on the German GDP release (weaker than expected) and has traded down to the 1.2880 level. He comments, “With the USD story very much intact it’s hard to see the single currency making too much of a recovery at the moment, and a close today below the daily cloud level 1.2936, should signal further losses. I still look to use any rallies as selling opportunities.”

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