USD/CAD stalls above 1.0521

At the moment USD/CAD is consolidating above the support line at 1.0521 after a sharp rally staged last Thursday. Given that the currency pair is trading in a long-term bullish channel, has recently bounced off its lower boundary, and the daily technicals are pointing upwards, there is a good chance the momentum will not disappear until the 2010 highs at 1.0701 are reached, though we should keep wary of the July high at 1.0609.

The situation in USD/CAD is largely unchanged from what we were observing last week, when an overwhelming majority of traders were expecting extension of the recovery. Right now 73% of bets placed on the pair are in favour of the U.S. Dollar's appreciation, while the bears are in a clear minority.