Canadian dollar and oil both testing the Feb lows
USD/CAD is tracking the fall in oil prices, both are at 5-week extremes. A larger build in oil inventories led to the selling and stocks have also given back gains, hurting risk sentiment.
Technically, USD/CAD looks like it could be making a break to the upside. The loonie has been a solid performer on the crosses but the US dollar is simply an unstoppable machine at the moment.
There was a similar pattern on the USD/JPY chart yesterday and it led to a minor false breakout. Watch the 1.2799 level closely.
I truly believe that -- right across the board -- there are only two US dollar trades at the moment. 1) long 2) on the sidelines. So far the first one is the big winner.
