The Canadian dollar is one of the biggest losers in the current currency wars, down 20 per cent against its US counterpart since July. It is especially hard hit in January (large blue candle), with the price action looking similar to that in 2008, and the relative strength index is at its most extreme since 1998. The parabolic move stopped suddenly just under 2009's high point (for the greenback) at the 50 per cent retracement resistance level (taken from 2002's record high at C$1.618). This technical set-up suggests a period of consolidation is due, probably above the psychological C$1.20 level and below C$1.30. Volatility should remain high as we expect sharp price swings, with investors having to learn to deal with this pair's new equilibrium.