USDCAD showing momentum divergence

USDCAD is showing the momentum divergence evident in many USD pairs - which could mean a bout of USD weakness as risk markets bounce and QE hopes swirl for a while.

USDCAD is fairly typical of many USD pairs over the last few days – in which we have seen new highs in the dollar posted on lower momentum (“momentum divergence”). If we continue to see a bounce in risk appetite, some consolidation in oil prices and talk swirling of the next round of QE on the way over the next trading sessions, USDCAD could take a breather here and poke lower toward the 200-day moving average creeping higher toward the 1.0100 area before finding renewed support for a try higher.

The overall trend remains higher, however, unless we dive fully back into the old range and at the moment, it's all about finding re-entry points for a renewal of the uptrend.