USD/CAD Reversal on Notice as Payrolls Report Looms Large
The USD/CAD currency pair has been on an incredible bullish run in September, surging more than five full big figures. However, after a false break above key resistance on Thursday, a clear bearish reversal pattern printed.
With the pair very stretched by historical standards, any reversal could have legs if it plays out. Confirmation is still needed, and with USD/CAD showing a close relationship with front-end US Treasury yields, Friday's US non-farm payrolls report looms large as a potential fundamental catalyst that could determine whether the signal sinks or swims.
The ATR 50 stretch indicator measures how far price sits from its 50-day moving average in multiples of the 14-day average true range. The reading is at historically extreme levels, sitting in the 97th percentile of all observations in a dataset going back to April 2013.