The technical picture has clearly deteriorated and if one buys into the thesis that we are in a 1.3225–30–1.32 range box, the recent trajectory in the pair still suggests another 50 odd pips of downside potential for the pair. The dominant buy-side flows on the Canadian Dollar are conditioned to further weakness in the DXY with Oil being more of a safe bet as even if flows turn against, there is a major divergence with the pricing of the pair, so plenty of catch up to do, especially in a correlated asset that has shown in recent months such a strong relationship. As I mentioned yesterday, as long as the DXY and the inverted Oil prices move down, the aggregate of flows should offset the capital flows derived from the CA-US bond yield spread, currently at the highest since last January. Note, the level of 1.3265 or thereabouts should act as the anchor or midpoint of the range.