Failure of the CAD to assault the old high's at the 1.0660/1.07 area probably disappointed some of the massive longs in this CAD. The pair has suffered accordingly, and is now trading at 1.0850. Crude oil is a couple bucks lower today, but equities remain in demand. A recurring investment theme is that US monetary policy will deflate the value of the dollar, and internationally traded commodities such as oil and some stocks will be the beneficiaries. Well maybe, but this is a very popular story, and may be one of the reason the open interest in the Canadian Dollar futures market exceeds other currencies such as the pound, yen and Australian Dollar.
You can see from the size of the last two candles some one has had a change of heart about the CAD, and you never know how deep the break will be. There are lots of reasons to believe that the CAD can trade at a new high compared to the US dollar, but we may have to first flush out some of the longs. We will be watching intently for a place to sell the USD versus the CAD.