Sell AUD/CAD for target of 0.9800 - Westpac

Analysts at Westpac are recommending to sell AUD/CAD cross with the following parameters:

“Entry: Sell 100% at 1.0040, Stop: 1.0120, Target: 0.9800”

Key Quotes

“Rationale:

• Markets are at risk of over-interpreting the RBA's neutral rate comments. RBA speakers may take the opportunity to address this
• Risk appetite may be reduced if global stocks continue to slide and so AUD is vulnerable
• AU labour data is a critical data risk for this trade
• Markets attach a higher chance to a BoC hike at their 25 Oct meeting (MPR due) than their next meeting 6 Sep. The 28% probability for 6 Sep hike is too low given the BoC’s expectation that the output will be closed by year’s end and crystal clear signalling to unwind 2015's insurance easings.”