There is a direct correlation between rising oil prices and the rise of the Canadian dollar.  Canada is the biggest beneficiary of rising oil prices because of their huge reserves.  So as the dollar dominates the other majors, the CAD stands alone. 

Something interesting is starting to form in the USD/CAD technicals.

The Dollar has been on the decline since May, 2005. The support and resistance trend lines since then have been converging.  They are tightly converged at this point and the open non-commercial futures position in the CAD are pretty high right now at just under 62000.   Out of the 62000, about 51000 are non-commercial long positions  and 8400 are non-commercial short positions.  I'm wondering where the CAD is going to get more buyers at this point. 

What I'm predicting is a breakout of the USD.  As I said, the trend lines are tightly converged and a breakout is due.  The breakout couldn't possibly happen for the CAD because of the already existing long positions.  Where there is a little room for more long positions, I wouldn't expect it to be enough to drive the price of the USD/CAD lower.

I'm not going to run out and long the USD/CAD at this point and I don't expect you too either.  What I am going to do is keep a close eye on the daily charts and be ready if the breakout does occur.