CAD/JPY was the top performing G10 FX trading in the first half of the year but H2 so far has been a disaster for the pair.
I laid out the case for covid fears on Friday and highlighted some things to watch earlier today. The market action seems to be running ahead of reality but if you're long CAD today, then the market is certainly winning the argument.
Technicals offer some solace with the pair now less than 40 pips above the April low after today's 144 pip decline.
Why is the Canadian dollar such an underperformer today? It's been one of the most-consistent longs in speculative data. Positioning has come through the last few weeks relatively unscathed. This looks like a speculative puke to me and that could be a sign of an interim bottom.