CAD/USD Options: Bullish move is seen gathering pace
|The Canadian dollar rose to two-week highs against the US dollar after the Fed minutes showed the policymakers are concerned about low inflation and may want to slow down the pace of the policy tightening if the price pressures do not rise in the near-term.
USD/CAD dropped to 1.2588 earlier today and currently trades around 1.2617 levels. The daily chart below shows the recovery from the low of 1.2413 had run out of steam around 1.2739 [23.6% Fib R of May high - July low].
USD/CAD Daily chart
Yesterday’s sell-off adds credence to the bullish exhaustion near 23.6% fib and signals more losses could be in the pipeline.
The preliminary data published by the CME for CAD/USD September expiry options further corroborates the view that the CAD is extend post-Fed minutes gains against the greenback.
The OI in the Calls improved by 568 contacts yesterday compared to miniscule additions seen in the Puts [+98 contracts].
The fact that max additions were seen in the ATM Calls - 0.79 strike and 0.7950 strike - only underscores the view that CAD is about to cut loose.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.