Canadian Dollar Challenges 1.0500

Commentary: We wrote last week to “look for a test of 1.0340 if 1.0531 gives way.” We continue to look lower as the USDCAD has dropped below 1.0500. The 100% extension of 1.0866-1.0530/1.0666 is at 1.0331, close to the 7/24 low of 1.0340.

This is an intial bearish target. The bearish case is strong as long as price is below 1.0666. 1.0571 is near term resistance. Strategy: Remain Bearish against 1.0666, target 1.0340