Forex trade idea ahead of the Bank of Canada
From Credit Agricole:
Both stabilising central bank rate expectations and relatively supported commodity price developments have been keeping CAD downside limited of late
However, still-muted domestic conditions as well as the risk of commodity price developments weakening more considerably anew should keep the likelihood of further policy easing from the BoC intact. Even if additional policy action as soon as this week appears unlikely, we expect the central bank to keep all options open.
Even if the BoC appears unlikely to consider lower rates this soon, it is likely to keep all options open in terms of further policy action.
As a result we remain of the view that the CAD should be sold on rallies, for instance against the USD.
Credit Agricole maintains a long USD/CAD position from 1.2485 targeting 1.3050. From a trading perspective, I don't really understand this. The market is virtually at their entry point and it sounds like they don't believe a cut is coming.
There is no need to be stubborn in forex trading. Why not get out for the day and then get back in? Or if you really believe in it, put a buy order 50 pips lower?
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