A wave of risk aversion to start the week is giving the US dollar a broad lift. The Canadian dollar is holding up better than AUD and NZD even with oil down 2.2% but that might only be a temporary phenomenon as technical resistance in USD/CAD gives way.
The pair broke the downtrend from March early this month and now it's broken to a fresh six-week high as it edges above 1.3259.
Could this be the start of a larger retracement phase? The 38.5% retracement of the drop since March is 1.3650 and that's certainly possible. The temperature in US politics isn't going down and the re-opening bounce is fading almost everywhere. For Canada specifically, the virus is picking up again in Ontario and Quebec; leading to new curbs on gathers that will extend to more closings is numbers continue to rise.
In the short-term, I wonder if today we see an early washout and reversal. I don't think the equity dip-buyers are ready to quit just yet.