Amid the mass depreciation of various global currencies, the Loonie has stayed relatively stable over the past few years. As a commodity proxy it should have the wind at its back through this current 17.5 year 'fear' cycle and that ought to continue until this cycle comes to an end. At present, austerity from Europe, fiscal cliff's in North America and now an environmental backlash out of China have collectively cooled global growth prospects and that has translated into weak demand for commodities which means a weaker Canadian dollar. With this backdrop, a test of the lower end of our current trading range doesn't seem too outlandish. Indeed, one got a nice short entry signal 11 weeks ago at or near 1.0015. Stops on that trade have yet to be moved so there still remains the potential for a substantial rally here in the short term. Could a mass infrastructure spending spree from Japan turn the bearish tide? At the moment, that prospect hasn't broken any existing trends but does explain the recent 'dead-cat-bounce'.