It was a month ago now that USD/CAD had bottomed-out. While the pair had spent much of the prior 17 months trending-higher, sticking to a bullish trendline for much of the time, the month of June brought a strong change of pace as the US Dollar fell while the Canadian Dollar strengthened. Out of the US, the USD was being driven lower by the prospect of rate cuts from the FOMC, and in Canada, a strong inflation print highlighted the fact that the BoC likely wouldn’t be able to adopt a similar stance. In short-order, USD/CAD fell from a late-May high above 1.3500 all the way down to the 1.3000 handle in mid-July. At that point, sellers began to shy away from a test of the big figure and later in the month, a falling wedge formation had formed, pointing to the potential for a bullish reversal. That theme has played out and almost a month later, continues to hold.
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