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USD/CAD drops and the rips higher on jobstravagenza

A nearly 120 pip turnaround in the pair

The Canadian dollar bears were lurking in the weeds.

The Canadian jobs report was a bit better than forecast and the US data a little weaker so the initial 50-pip drop in USD/CAD made sense.

But it didn't take long for a reversal. Fresh questions have been circulating about the Canadian economy after the March trade balance report was the worst on record. Toss in some commodity softness and risk aversion and the elixir is right for USD/CAD gains.

The pair ripped to a session high of 1.2952 after falling as low as 1.2836 (or lower on some screens). The pair is now consolidating around 1.2915 as it sorts out what to do next.

What next

The cues are likely to come from stocks and oil but beware of chasing CAD on oil gains. If WTI rises it's like because of cuts in Canadian supplies due to the intense wildfire in the oilsands. That leaves a narrow path to CAD victory, especially with this week's persistent weakness.

On the upside, 1.30 will be the big test. I don't see any realistic way to get there today. Baker Hughes oil rig data is later and the fall-off in rigs has been supportive.

Generally, the trade is to set up for gains next week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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