USD/CAD rallies to session high and yet-another test of the 1.28 area

It’s looking like an outside say in USD/CAD (though you could forgive it given yesterday’s holiday).

The pair fell earlier today on strong oil and a steady risk tone but it’s been ratcheting higher for a few hours and has now cut through the session high to 1.2775. There are a number of recent highs close to 1.2800 and the pair has been consolidating since late January.

The pair is feeling the push-and-pull of risk aversion balanced with energy and commodity strength. I don’t see an imminent ending to that divergence but much of it hangs on Ukraine and Iran.

If it can crack the upside, it could be a quick trip up to 1.2950. You’d have to think that would coincide with new lows in US stocks.