USD/CAD climbs back to 1.2600 as shorts pump the brakes

USD/CAD climbs back to 1.2600 as shorts pump the brakes

USD/CAD down sharply this week

The week started with headlines saying no preliminary NAFTA deal would be reached this week at the Summit of the Americas and USD/CAD rose 40 pips to just above 1.28. Shortly afterwards the pair swooned and in three days fell to 1.2600. 

Several forays lower have failed to extend beyond 1.2545 and today the pair is taking a bit of a breather, hitting 1.2600 from a low of 1.2549.

Given the speed of the fall and some better signs for the US dollar, a bit of consolidation here is no surprise. If anything, you might have expected more of a bounce.

If that doesn’t come on Monday, I think it’s safe for the shorts to pile back in. In the short-term, watch the 200-day moving average at 1.2627.

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