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19 May 2015
Specs continue to cover CAD shorts, remain long CAD/JPY – RBS
FXStreet (Barcelona) - Brian Mangwiro, Strategist at RBS, comments on the positioning data for CAD, and further gives the outlook for USD/CAD and crosses.
Key Quotes
“Speculative accounts continued to cover their short positions, and for the 10th week running. Last week, specs’ net short fell 6.1k (~60.5%) to -3.9k. It is also the smallest net short since Sep’14. Similar to the last few weeks, this was predominantly off Levered players whose net short fell 7.4k on the week to -11.1k. Dealers are now net shorts as well, up 12k on the week to -13.9k.“
“Strategy: CAD FX has found support from oil resilience, a neutral central bank stance and subsequent sell-off on front-end CAD rates. In the latest ‘What’s Priced-In’, we discuss how the balance is finally poised, with front-end CAD rates (1f 1yr) and USD/CAD at key supports, and oil approaching key resistance at $70. We still like longs on CAD/JPY (entered at 98.64) or CAD/SEK. The latter is unchanged on the week, and back to the 100d ma (6.82)”
Key Quotes
“Speculative accounts continued to cover their short positions, and for the 10th week running. Last week, specs’ net short fell 6.1k (~60.5%) to -3.9k. It is also the smallest net short since Sep’14. Similar to the last few weeks, this was predominantly off Levered players whose net short fell 7.4k on the week to -11.1k. Dealers are now net shorts as well, up 12k on the week to -13.9k.“
“Strategy: CAD FX has found support from oil resilience, a neutral central bank stance and subsequent sell-off on front-end CAD rates. In the latest ‘What’s Priced-In’, we discuss how the balance is finally poised, with front-end CAD rates (1f 1yr) and USD/CAD at key supports, and oil approaching key resistance at $70. We still like longs on CAD/JPY (entered at 98.64) or CAD/SEK. The latter is unchanged on the week, and back to the 100d ma (6.82)”