FX Action: USD-CAD has settled in the lower 1.25s
FX Action: USD-CAD has settled in the lower 1.25s after logging a 10-week low at 1.2499 on Tuesday. 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. Analysts anticipate that the pairing will lose directional impulse into the duel release of the U.S. and Canadian employment reports this Friday, the net outcome of which analysts expect will be positive for USD-CAD. Analysts 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%. Analysts 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.