USDCAD:Dollar/CAD is starting the week with a mixed tone. Buyers stepped in during the Asian session last night on the heels of some crude oil selling following what markets are deeming a one and done airstrike in Syria late Friday, but these buyers have been met with some broad USD sales in the 4am hour and so the market is back to where it closed out on Friday. This broad USD selling is now starting to pick up steam, but the downward pressure on USDCAD has been muted because of EURCAD and GBPCAD buying. US Retail Sales will be on the radar for markets today, with traders expecting +0.4% MoM for March. Chart resistance today in USDCAD is 1.2625. There is some support at 1.2585-90, with better support at 1.2560-70. We think USDCAD may whip around a bit today following the release of the US data, but will remain range bound ahead of the Bank of Canada meeting later this week (Wednesday). There are also some large option expiries on Wednesday (1.8bln between 1.2585-1.2600) which may keep the markets stuck until then. The relatively new USD long (CAD short) position remained largely unchanged in the week ending April 10th (according to the latest COT report from the CFTC), which is a bit surprising considering the steep decline in USDCAD over the reporting period.
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