I talked about the wedge forming in copper yesterday and it’s interesting to note that the exact same pattern is unfolding in USD/CAD. Look for these two to breakout together, and in a big way in early-to-mid January.
I’m bearish but I’m not at the point where I’m ready to make a definitive call. The crisis in Europe and malaise everywhere else shows that the worldwide economy is extremely vulnerable to a shock. The four most-likely culprits are European sovereigns, European banks, US banks, China.
But I would say the odds are equal that Europe starts to get a solution and the US economy continues to expand. In that case, commodities and CAD would take off. Either way, I will be ready to make a big trade in early-mid January.
