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USD/CAD is at the highs of the day, up 175 pips to 1.3034.
That puts the pair within striking distance of the closing high for the year, which was at 1.3037 and set on June 17. That day they pair also set the intraday high at 1.3079.
The loonie is the second-best performing G10 currency this year after the US dollar. But as the market shifts its focus to a global growth slowdown, it’s vulnerable.
Technically, the double top at 1.3079 was negative for the pair but the lack of follow-through to the downside in the past three weeks along with the big jump today suggests further upside — something I’ve been calling for.
A pop of the upside and continued slump in energy/commodities could lift the pair to 1.36/1.37 in the next few months. The measured target of the broken double top would be 1.36.
I spoke more-extensively about my playbook for the Canadian dollar (and the euro) last week on BNNBloomberg: