TD Research notes that USD/CAD saw its biggest one-day move in nearly two-weeks following the DoE crude inventory report.
“The DoE report was quite weak, reflecting two notable factors. First, total inventories showed a significant build of nearly +3.3mn. This comes despite the decent drawdown in the API data earlier in the week. Second, the DoE report showed a significant buildup in gasoline supply, which is consistent with earlier reports. Crude saw another 5% drop and marked a close below the key $47bbl level.
Keep in mind the nearly 0.5% bounce in USDCAD is consistent with the beta on a 5% drop in oil,” TD adds.
“Still, we remain short and look to fade the rally,” TD advises.
In line with this view, TD maintains a short USD/CAD* position from 1.3700 targeting 1.3200.
Source: TD Securities Research
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