Short-Covering Rally Starting in USD/CAD

Negative news from the U.K. regarding its debt rating is leading traders to seek the safety of the U.S. Dollar overnight.  This is helping the U.S. Dollar start a short-covering rally versus the Canadian Dollar.

A bearish report from Standard & Poor’s regarding the state of the U.K. debt rating led traders to seek the safety of the U.S. Dollar overnight. This news may cause a shift in investor sentiment today that could trigger a short-covering rally in the U.S. Dollar versus the Canadian Dollar.

The USD CAD hourly chart is indicating a change in trend to the upside. If the bottom at 1.13467 holds on a retest then look for this pair to begin a retracement rally to 1.15800 to 1.16350.