I am stalking this trade like a tiger. Watch the wedge on the daily chart in USD/CAD. When it breaks, expect a 600-700 pip move. For confirmation, check the similar chart in copper.
My bias is to the upside because my base case for 2012 is disappointing growth. A multitude of political pitfalls remain and the commodity bull market has gone limp.The BOC has room to cut rates while the Fed is reluctant to implement QE3.
That said, I’m keeping an open mind. Corporate profits have been solid and the US economy could pull it together for 3-4 months. That would send USD/CAD to 0.96/0.97. Either way, I’m going with a break on the chart.
