Forex Flash: USD/CAD to press lower on US and Canada jobs – TD Securities

FXstreet.com (Barcelona) - As the greenback trades broadly stronger today ahead of the employment reports from the US and Canada, the slightly more risk-off undertone to the markets is not obviously hurting the CAD, though it is perhaps underpinning funds in the mid/upper 0.99 area where the market has found solid support in the latter part of this week.

"The broader strength in the USD so far today suggests that a good US NFP number is already perhaps partially factored in", wrote analysts Shaun Osborne and Greg Moore, expecting also pullback in Canada October job growth. Both US and Canada indicators combined should encourage the modest drift lower in short-term Canada-US spreads seen since September's peak of 95 bps at the 2-year sector of the curve. "The gap is edging below 80 bps again the morning and nearing the 78bps low seen in October on the Carney communication kerfuffle", they added, stating that the weakening CAD correlations versus equities, commodities and spreads are not as much as influential on spot as are the 2-year spreads (48% on rolling 22-day study basis) since mid-October.

"USDCAD is drifting around the 200-day MA.We see good support at 0.9950 still and intraday gains back through 0.9990/95 should see spot retest 1.0020.We remain USD-bullish", wrote the analysts.