USD/CAD: Prospects Of Further Selling Justified

As I ask myself, is the pair’s backdrop conducive for an extension of the losses seen on the back of the dovish FOMC? The unambiguous answer would be ‘Yes, it is’. The congruence is clear, with Oil on the rise, the DXY falling off a cliff and the US-CA bond yield spread revisiting its Feb lows. However, it’s not only a matter of deciphering intermarket flows, but also marrying that up with technicals, which as a caveat, are not yet as clear cut as intermarket is. The reason being is because the pair has failed to break into lower lows to instead find a cluster of bids circa 1.3260, as was the case on March 19th. What this means is that the market should still be potentially treated as being in the process of a potential range until we do see a breakout lower before. That said, there is no reason to think that buy-side attempts off 1.3260 or thereabouts will gather much momentum as things stand.