I’ve felt for some time that the market has been getting way ahead of itself on the bullish USD front, especially with expectations that we would see a significant rise in interest rates over a short period of time. The Fed seems to be of the same view, namely that the US economy still needs stimulus.
There is little point in fighting a strong trend but once you think it’s starting to turn, then you must jump on with conviction.
I’ve gone short USD/CAD at 1.1105 and will look to increase the position as the important short-term levels become more apparent. I have a stop on the strategy above 1.1270.