USD/CAD inter-markets: 1.35 on the radar

USD/CAD is navigating levels last seen in late February in the mid-1.3400s for the time being, gathering further traction following US and Canadian labour market releases, although a better view of the future direction of spot, and particularly the greenback, will come after the US presidential elections next week.

In the meantime, jitters on the US political arena, namely the chances of D.Trump being the next US President, seem to have eased somewhat at the end of the week, allowing a tepid rebound in the US dollar.

Yields in the US money markets are rebounding from daily highs in the wake of today’s Payrolls figures, although they still keep the red territory for the day. In the broader picture, 2-year, 5-year and 10-year benchmarks have practically retraced the advance seen in mid/late-October.

Fed Fund future prices are still pointing to a probability of a Fed’s rate hike in December at above 71%, according to CME Group’s FedWatch tool.

On the CAD-side, the continuation of the sell off in crude oil prices has dragged the barrel of West Texas Intermediate to test fresh 2-month lows in the mid-$43.00s, following recent large build in crude supplies. Adding to the ongoing weakness, scepticism on the probability of a deal regarding an output freeze at the OPEC meeting in Vienna continues to grow bigger, keeping traders’ sentiment depressed.

In the meantime, the next up barrier for USD/CAD appears at 1.3575, the 50% Fibo retracement of the yearly drop, ahead of the 61.8% retracement near 1.3840. Additionally, as long as the 6-month support line underpins – today at 1.2990 – the upside bias should remain intact.

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