The USD CAD failed in its attempt to make a new high for the year and sold off into the close. This could be an indication of a short-term top which could trigger a sizeable correction. The inability to make a new high following another day of bearish U.S. economic reports may be indicating that the recent recessionary fears may have been overplayed. Higher commodity prices on Friday should put more downside pressure on the USD CAD. Watch for a follow through break today to confirm Thursday’s reversal. Aggressive counter-trend traders can play the short side with protection over the recent top at 1.2120. Better than expected Building Permits and Housing Starts Reports could trigger a rally in commodity prices which would be bullish for the Canadian Dollar.