USD/CAD Hits Six Month High

USD/CAD bulls took advantage of quiet holiday conditions and pushed about resistance in the 1.01 area to the highest since August. The 1.0090 final target in Ashraf's Premium Insights has finally been hit. The Australian dollar was the top performer while JPY lagged alongside CAD. Overall trading was light but it's likely to pick up with Japanese department store sales on the calendar. 2 trades in CADJPY remain in progress in the latest Premium Insights, in addition with 1 of 2 EURUSD in progress, the other unfilled; 1 of 2 USDJPY hit all targets, other in progress 2 GBPUSD of 2 in progress 1 AUDUSD short in progress (9 pips away from 1.0270 final target) 1 of 2 EURJPY hit all targets, other in progress. 1 of 2 AUDJPY in progress, the other unfilled 1 CADJPY in progress - 11 pips away 1 EURGBP in progress 1 of 2 Gold in progress, the other unfilled 1 of 2 Silver in progress, the other unfilled 2 of 2 oil in progress

USD/CAD rallies toward 1.01 have been beaten back several times in the past month. The pair rallied late last week on soft Canadian manufacturing data and the pair pushed through the key level shortly before the European close.

It is dangerous to chase a breakout in low liquidity so the day ahead will be important for USD/CAD. A definitive fall below 1.0080 would point to a false breakout and possibility of a drop back to parity.

Euro and yen trading was extremely light during US and European hours. Draghi spoke to EU parliament but his comments rehashed previous statements. He continues to expect more economic weakness early in the year and a gradual pickup late in 2013.

In Japan, speculation about the nominee for BOJ leadership continues to mount. A decision is expected before the end of next week. The leading candidates are Iwata who has vocally advocated for more easing and a weaker yen and Muto who is the favorite but is less likely to endorse further radical moves.

Economic data in the upcoming session includes January Japanese department store sales at 0530 GMT. There is no consensus estimate and in Dec, sales fell 1.3%.