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USDCAD Nearing Session Lows With Jobs Reports Digested

CANADA
  • USDCAD whipsawed after the release of the US and Canadian employment reports but now heads towards session lows, currently ~30 pips below pre-jobs levels at 1.2962 for -0.4% on the day.
  • Both reports saw supply side constraints, with participation rates falling which helped push US underemployment and Canadian unemployment rates to series lows (despite Canadian jobs surprisingly declining -43k from part-time).
  • Can-US yield differentials have been trimmed further from recent highs but remain supportive for CAD with the 2Y at +15bps and 10Y at +20bps.
  • Technicals see short-term bullish conditions with a key short-term resistance at 1.3084 (Jul 5 high) but for now support is eyed at the intraday low of 1.2954, clearance of which could open the 20-day EMA of 1.2904.

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