Research Team at BBH, notes that the US dollar posted a downside reversal against the Canadian dollar on October 13 and saw follow through selling on October 14.
“For the first time here in October, the greenback closed below its 20-day moving average. Technical indicators warn of additional downside risk in the days ahead. The low thus far in October was set near CAD1.3070. The US dollar has not traded below CAD1.30 since early-September. The risk to this negative technical view comes from the Bank of Canada meeting on October 19. Without easing policy, it may be more dovish than the market expects.”