Credit Agricole Research advises against chasing CAD higher (USD/CAD lower) around current levels.
"Better risk sentiment coupled with rebounding commodity prices have been keeping CAD in demand for most of the week. With central bank rate expectations remaining stable, it will stay about external factors such as risk sentiment in general and commodity prices in particular to drive the currency," CACIB notes.n
"While risk sentiment has been improving of late, we believe some caution from here stays warranted. Such a stance coupled with positioning data suggesting the CAD is not trading far from overbought territory, argues against chasing the currency higher from here," CACIB adds.