As can be seen through this chart, the USDCAD has broken up above some very key levels dating back to 2010, while in the short term there may be some covering headwinds there is a very strong potential that we head up to 1.0650 and then even further through to 1.0850
|USDCAD. Thomson Reuters|
|USDCAD vs US2CA2 yield spread (LHS). Thomson Reuters|
Because of this, maybe there is a short term play for the AUDCAD, As we can see below there has been a divergence between short term yields and this relates directly into swaps and is inherently bullish
|AUDCAD vs AU2CA2 yield spread (LHS). Thomson Reuters|
Furthermore Price action is experiencing bullish divergences against both RSI (14) and Slow Stochastics.
|AUDCAD. Thomson Reuters|
In terms of fundamentals it should be very light, china may pose some issues as they could be on the verge of inducing liquidity measures to calm the banking system, this would be AUD positive but I wouldn't rely on it. From there we have CAD GDP on friday but that's a long way of now.
EDIT first ask of the week came in at 0.9600 so I entered there.
As I type Market in AUDCAD is 0.9735, and due to USDCAD bearish daily close I've decided to cover this trade for +135 (+0.5 in swaps)