[USD, CAD]
USD-CAD ebbed to a 10-week low of 1.2483 yesterday, and has since remained heavy. The pair has broken lower over the last week, through two-month range lows at 1.2613-23, which now revert as resistance levels. General U.S. dollar weakness and the CAD-Favourable break higher in oil prices, which have traded above $60 for the first time since mid 2015, have been weighing on the pairing. Today brings the duel release of the U.S. and Canadian employment reports, the net outcome of which we expect will be positive for USD-CAD. We forecast the U.S. jobs reports with a 225k headline (median 190k), made up of a strong private jobs figure of 220k, and with the jobless rate holding steady at 4.1%. We expect the Canadian jobs report to show a 5.0k gain in jobs, correcting after the 79.5k surge in November, with the unemployment rate edging up to 6.0% from 5.9%. Ahead into 2018, how the U.S. dollar benefits from the expected tax overhaul, how oil prices evolve, how NAFTA re-negotiatios go, and how the BoC proceeds with its slow-go tightening cycle will be dominant themes for USD-CAD. Trend support is at 12470.
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