USDCAD – Momentum fading at a potential retest of year to date highs
USDCAD pared its earlier strength as it broadly tracked movements in the price of crude oil, with attention shifting to the Bank of Canada interest rate decision today. The Bank of Canada is widely expected to hold interest rates at 0.50 percent through 2016 which contrasts with the US Federal Reserve, as many believe it will raise rates in December.
Bulls have the ball while 1.3280/60 supports intraday downside. A close below 1.3220 would ease the near term bullish bias and suggest a broader correction is underway.
- Broadly in line with my USD Index view I am anticipating a test of year to date highs in the USDCAD, ideally a stop run just above the highs
- I will be monitoring price action for intraday reversal patterns at or just above year to date highs to venture short, adding on a daily candle that takes out the year to date highs and closes negative on the day, placing protective stops on short positions above the highs of the entry day.