Fibonacci retracements are the right tools after quick, one-way moves

I highlighted the Fibonacci retracement levels in USD/CAD earlier today and that's right where USD/CAD stalled out.

The pair is now down 20 pips on the day a 50 pips these levels, trading at 1.2475 at the moment.

The failure at the first Fibonacci test increases my confidence that this pair is headed lower. There's an argument for prudence until yesterday's low of 1.2460 breaks but after that the next stop is the March low of 1.2365.

The inflationary and commodity argument is increasingly difficult to get away from. The comments in the KC Fed manufacturing survey were unequivocal and alarming. Corn prices today were limit up, lumber is insane.

Oil is the final lynchpin and that's a tougher one with planes not flying as much but you have to think it's only a matter of time.

I spoke with BNNBloomberg yesterday about where the loonie is headed:

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