24.10.201900:39 Forex Analysis & Reviews: Canadian dollar could go uphill

The Canadian currency has not been very pleasing to market participants recently. Periodic subsidence of the loonie confused investors and contributed to the fading of their interest. However, now the situation may change, experts said.

Experts draw attention to the formation of bullish trends in relation to the Canadian dollar. The Canadian currency almost did not respond to the election results in the country, but actively responded to the actions of buyers. Interest in the loonie has sharply grown since the release of strong economic data, but then faded away amid weak retail sales in the country.

In this situation, option traders, who are confident in the growth of the Canadian dollar, have become more active. They were not frightened by the fact that the loonie has been in a downward trend for a long time. The USD/CAD pair was trading at 1.3099–1.3100 on Wednesday morning, October 23. The market perked up and began to predict further growth of the pair

However, the situation began to unfold in a different direction. After testing the key level of 1.3200, the USD/CAD pair weakened. Recall that the Canadian dollar survived a two-week rally, which raised it to an impressive height. At the moment, the USD/CAD pair has fulfilled the growth impulse and completed the correction, analysts emphasize. They allow the rise of the loonie to 1.3180 with further correction to the level of 1.3127. Now the pair is trading in the range of 1.3095–1.3096, slightly sifting after the morning increase.

Analysts recommend opening short positions on the Canadian dollar. They emphasize that this will be the so-called "trade against the crowd", as many traders are in long positions. They do not exclude that those who were not afraid to go against the tide by betting on short positions on the USD/CAD pair will benefit.