20 Mar 2014
USD/CAD a favourite long - Societe Generale
FXStreet (Guatemala) - Sebastien Galy, Senior FX Strategist at Societe Generale explained that the USD/CAD is now a favourite long helped by the BoC stance and a normalisation of Fed policy.
Key Quotes:
“The layer of USD/CAD strikes (report) suggests another run through barriers almost to 1.14 starting at 1.13 and then a consolidation lower."
"As this is a beloved medium term trade, the pattern should be that CTA momentum algos flip to shorts at the top cose to 1.14 and macro wait for bottom to buy presumably around 1.13 or a bit below. As I see Canadian banks now pushing the breakout story in USD/CAD, I can only presume their option desks are well positioned for a break higher in USD/CAD. Hence, the pain as strikes are taken out may be more limited than what can be seen in the strike reports."
Key Quotes:
“The layer of USD/CAD strikes (report) suggests another run through barriers almost to 1.14 starting at 1.13 and then a consolidation lower."
"As this is a beloved medium term trade, the pattern should be that CTA momentum algos flip to shorts at the top cose to 1.14 and macro wait for bottom to buy presumably around 1.13 or a bit below. As I see Canadian banks now pushing the breakout story in USD/CAD, I can only presume their option desks are well positioned for a break higher in USD/CAD. Hence, the pain as strikes are taken out may be more limited than what can be seen in the strike reports."