A relief rally is justified in the Canadian but we don’t see the prospect of a major reversal unless the risk-on vibe becomes a global event. Even in the face of a period of optimism the Canadian will have the threat of a strong Dollar hanging over its shoulder. In fact, Canadian bulls have to be watchful of US data as anything strong from the US in the wake of the Fed’s intention to become data dependent, could yank the legs out from under the Canadian and send it to fresh lows.
