USD/CAD at the best levels of the day

The momentum from Friday's soft retail sales report is putting a fresh bid in USD/CAD. The pair is up 20 pips on the day at 1.2647. That leaves it within striking distance of the Aug 31 high of 1.2663.

There is a bit of a head-and-shoulders bottom unfolding, although not as clear as the similar pattern in EUR/USD. The neckline has already broken but a climb over the August 31 high would help to cement the momentum.

The measured target of the move is 1.33.

To get there, you would have to envision a dovish BOC and some substantial progress on US tax reform along with a December Fed hike.