When investors get edgy, they buy the buck. And they have had plenty to be edgy about lately, what with Greece's ongoing troubles, Spain's distress, and the looming fiscal cliff.
The edginess may not go away any time soon. But Camilla Sutton, chief currency strategist at Scotiabank, says some key props for the dollar are weakening.
Sutton points out in a note to clients that a variety of technical factors are "suggesting there is further USD/CAD downside ahead." The nine-day moving average for the pair is now below the 21-day moving average, she says, and the MACD, or moving average convergence/divergence "is in sell territory."
Want more evidence? Sutton says the RSI, or relative strength index, is below 50. That indicator can be used to indicate trend formation, and a level below 50 suggests a possible downtrend ahead.
Be careful out there.
