The effects of higher US yields continue to ripple across assets. Even currencies that were relatively lagging in their response (such as the KRW and CAD) are now staging breakouts in favour of a higher USD. USD/CAD appears to have completed a pattern similar to the one AUD/USD completed in May. Assuming that the move in AUD/USD was a blueprint for the move, the risk is for USD/CAD to test its peaks of 2011 and 2010. This view is further supported by a recent Bearish Reversal Week completed in WTI crude as commodity markets respond negatively to the higher USD.
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Barclays