USD/CAD held up quite well against the strong non-farm payrolls in the US and the disappointing employment report in Canada. Nonetheless, economists at TD Securities believe the currency pair is forming a higher base and a bullish break above it. resistance major at 1.3080 is inevitable.
Disappointing employment figures do not help the CAD
“The disappointing jobs numbers didn’t help the CAD, especially against the much stronger US payrolls report. The data mix supports USD/CAD on the upside, but we don’t think the pair will break through resistance 1.3080 in the near future. More dominoes need to fall before that happens. But make no mistake, it will happen.
“We think USD/CAD is forming a higher base, and we think it’s dangerous to keep risks on US inflation and the Fed’s CIE (Common Inflation Expectations) Index next week (l US CPI is expected to be as strong as the last report (while CIE is likely higher).
“We are long USD/CAD and aim for 1.35.”
See – Canadian Dollar: Big Five Banks Forecast, Top G10 Currencies Only Moderate Recovery
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