USD/CAD rises to a fresh six-week high as the USD bid continues

Oil is flat today, equity futures are slightly higher and yet the US dollar continues to climb broadly, and particularly against the commodity currencies.

This is the fourth day of gains and they’ve come in some different risk backdrops and that suggests that something has changed.

I’ve been calling the dollar rally this week the ‘moment of truth’ on whether it’s a genuine retracement or a dead-cat bounce. It’s looking more and more like a retracement. What tempers my conviction is that USD/JPY keeps rising and I can’t help but wonder if the MoF is involved.

Technically, the break above the June low today is constructive for a further climb to 1.35 or even the 38.2% retracement of the fall since March at 1.3633.