USD/CAD is up more than 130 pips on the session as the US dollar extends its advance.

There’s some risk off tone and WTI crude is down 50-cents but this is mostly about the broad US dollar advance. The move has caught the market off guard and it’s starting to look like a real squeeze.

The three doji candles followed by this big move up today is a solid reversal signal for a pair that’s trended lower since March.

We will hear from the BOC today via the Business Outlook survey. It’s a key input for the central bank and should offer some clues on the real-time state of the economy.

If there is a broad US dollar rebound, the Canadian dollar should tail close behind. It will be one of the big beneficiaries of US spending and Trudeau also isn’t afraid of a massive deficit. If the Fed starts to tighten, the BOC will be right behind and it’s tough to envision a reflation trade without commodity inflation.