The USDCAD rate has broken the triple top at 0.9850 and appears poised to test 0.9940. The US dollar demand stems in part from EURCAD buying and perhaps position squaring ahead of the employment data on Friday as the most recent Commitment of Traders report showed long Canadian dollar positions to be stretched. The short-term USDCAD technicals are bullish targeting 0.9940 on the break of 0.9850 overnight. The dominant USDCAD downtrend from 1.0440, intact since June, 2012, converges with the hourly uptrend channel at 0.9940. If 0.9940 is broken, it would set up a test of the 200-day moving average at 1.0025. For today, USD support is at 0.9850 and 0.9820. Resistance is 0.9875 and 0.9915. Personally, I think that USDCAD is entering into "sell-zone" territory. There is a tonne of resistance in the 0.9940-60 area and the existing short term USDCAD uptrend channel is fairly steep, negated by a retracement through 0.9830. The catalyst would likely be better than expected employment data from Canada coupled with an improving US economic outlook and rising WTI oil prices. The wild card is if a Spanish bail-out request sparks EUR demand and selling of CAD versus EUR. Consider selling USD/CAD around 0.9930, stop above 1.0025 (200-day moving average) for a retest of 0.9640.

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