August 05, 2022 18:36 GMT
- USDCAD sits +0.5% at 1.2928, having earlier cleared firm resistance at 1.2947 (Jul 25 high) with a session high of 1.2985 an hour after payrolls.
- In doing so it pushes further back against the recently emerged technical bearish outlook and opens resistance at 1.3038 (Jul 18 high).
- A further decline in Can-US yield differentials to recent lows (2Y flat, 10Y -9bps) helps drive this move but CAD sees some support from oil nudging higher to outperform other majors on the day, albeit with correlation fading again on a rolling 20-day basis.
- Further sizeable option expiry for Monday’s cutoff with 1.0B at 1.2950 could provide some traction in what is likely to be a session driven by headlines with a dearth of US and Canadian data/speakers.