As mentioned on Friday here – BoC July rate hike odds jump to 90%, USD/CAD is oversold, a 25 basis points rate hike has been priced-in. CAD is overbought. Profit taking could be seen after the BoC rate hike. The best pair to play the CAD weakness is the CAD/JPY pair. This is because the JPY is oversold as well…and due for correction.
Have a look at the daily CAD/JPY pair. The cross is nearing inverse head and shoulder neckline and looks exhausted. The rejection at neckline usually proves deadly.