USD/CAD towards 1.29? OPEC Meeting & Canada’s Domestic Data Key Drivers

Dollar/CAD moved up from the 1.27 handle, but perhaps it has more room to rise. The pair faces key events from OPEC to a very busy Friday in Canada. What is the trade? Here is the view from Barclays:

Here is their view, courtesy of eFXnews:

Barclays Capital FX Strategy Research discusses USD/CAD outlook this week and notes that the market will be watching the outcome of the OPEC meeting on November 30 along with Canada’s Q3 GDP and the November employment report which will be released on Friday.

“OPEC could disappoint market expectations and Canada’s GDP is likely to show a slower pace of activity in Q3.

A lower-than-expected GDP print could weigh on the loonie, as the BoC counts on broad and sustained growth to yield price pressures. We forecast quarterly GDP to have slowed to 0.60% q/q annualized in Q3 (previous: 4.5%), bringing total annual growth down to 2.84% y/y,” Barclays argues.

In line with this view, Barclays recommends being long USD/CAD* from 1.2696 as its trade for this week, targeting 1.2890 with a stop of 1.26 (above the 100-day moving average) for a reward-to-risk ratio of 2:1.

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