SEB Research sees a scope for USD/CAD to rally towards 1.35 in Q4 and will look to sell into such rally if materialized.
"We see risks that the dollar may gain during Q4 for many reasons. This should be USD/CAD positive due to the pair's high sensitivity on risk appetite and oil. However, the Canadian dollar is the only G10 currency that investors are not particularly long vs. the dollar, which could give some extra support for the pair to move lower next year as the global recovery gains pace again," SEB notes.
"In short, we expect the USD/CAD to rally towards the 1.35 level during the coming months, which should be seen as an opportunity to build shorts,"SEB adds.