Originally published by AxiTrader
If you've read my other musings today you'll know that while I can't deny the price action which saw the US dollar come under intense pressure, I'm not on board with the narrative that dismissed what I see as a pretty forthright Fed when it comes to rate hikes this year.
Only two participants in the dot plot were below the median today compared to last December when there were six folks. The doves are morphing.
Anyway, of all the currencies where the move makes the most sense fundamentally as well as technically it is the strength in the Canadian dollar, which outperformed the other majors overnight - helped by the surge in oil prices and the US dollar's fall - driving USD/CAD back below 1.2900.
That means at 1.2896 as I write the USD/CAD is breaking down and through the uptrend line it has cycled back to and bounced from since the rally began in early February.
The initial target if this break holds is 1.2790 which is the garden variety 38.2% retracment of the move over the past 7 weeks. That seems a reasonable chance now prices are testing/breaking the mid-Bollinger Band as well.
Below that it's 1.2687 and 1.2583.
Here's the chart:
The Canadian dollar is also doing well on the crosses and is likely to continue with that emerging trend as fears of NAFTA and the oil rally feeds into prices
Have a great day's trading.