USD/CAD continues rally
After closing the day yesterday above the important 1.33 level USDCAD appears to be signalling that the bullish sentiment behind the US currency has some real weight behind it. We’d expect resistance around the 24th January high of 1.3375 but the market looks to be psyching itself up to at least have a stab at it. If the pair closes above that level the way looks clear for a test of the 1.3650/70 level that proved too much for USDCAD at the beginning of the year. We don’t see any gain coming in the form of an aggressive rally – there will be opportunities to buy dips as well as sell upticks, but it looks likely that we are seeing some substance here that is outweighing the normal considerations of a short squeeze, and if the move is on the cards it makes sense to dedicate some resources to it.