There is going to be a lot of crying in one’s beer around the bar tonight. USD/CAD closed in a somewhat gray zone overnight; below the 1.3008 area that would have given longs the greenlight but close enough to keep many hanging onto thor longs after the buck spiked as high as 1.3063 intraday. What happened after that? The dollar became a dead-weight as the world suddenly embraced risk just as it shunned it a mere 12 hours earlier. Asia began to sell dollars and that price action carried through Europe and right through to North America. The buck is now two-cents below session highs and longs are wondering what in the world hit them.
USD/CAD tested the 10-day moving average at 1.2798 a short while ago is now bouncing back. Further important support is now down at 1.2710/20. A break below that level will be a loud signal that a medium-term top is in place.
