Short AUD/CAD: G10 trade idea of the week – Deutsche Bank

FXStreet (Delhi) – Research Team at Deutsche Bank, suggests going short on the AUD/CAD pair for the week for the target of 0.96 with entry level being 0.9930, while maintaining a stop loss of 1.01 levels.

Key Quotes

“AUD/CAD is overvalued given differentials in the terms of trade and short-term rates, as well as global volatility gauges. The recent divergence in speculative positioning in favour of AUD is unusual; historically positioning in the two currencies is strongly cointegrated. Policy risk should not interfere with correction to fair value.”