The clues of such an event have nothing to do with the economic situation and everything to do with the irrational tendencies of human nature.
The 1.3315 AREA is an important inflection point because it can lead to a failed low price formation. A failed low is when price goes proportionally lower than a previous low, but by a limited amount. The USDCAD is in such a location at the moment, even though bearish momentum continues. In order for us to justify taking risk in such a situation, we need to see a bullish reversal setup around the current level (1.3200s).
The reason why such a swing trade idea is attractive is because of the potential. It is proportionally within reason for this pair to revisit the 1.34 or 1.3500 areas within the next few weeks. As a short term momentum trader, all I am interested in is capitalizing on brief changes in momentum, no matter what the fundamentals or economists say.
In order to accomplish this, we measure extremes in sentiment as it expresses itself within price patterns. Right now the USDCAD is in such a high probability reversal location, but we need a clear setup in order to effectively measure risk. Do not lose sight of the fact the current price action is part of a broad correction of the rally that lead to the April peak. Another compelling reason to anticipate a significant bullish retrace from current levels.