FXStreet (Delhi) – Research Team at TDS, note that the USDCAD put in a decent rally yesterday that punched above resistance in the 1.3160/70 region only to fail ahead of the 1.32 figure. Key Quotes “Fairly hawkish comments from Fed Chair Yellen and a strong ISM services report, which was very solid in both the headline and the details, provided the immediate catalysts. Despite this, we think USDCAD's reaction was still underwhelming.” “With the services ISM’s employment subcomponent rising, it does suggest to us that our forecast for job growth just shy of 200k looks reasonable, if not tilted to the upside. So, while we think that trading payrolls is mostly just an exercise in trading noise, a solid jobs report should be enough to push USDCAD higher. The next key level on the topside is 1.3200/20, which we think could put an assault of 1.33 on our radar by the end of this week. This comes as our estimate of ‘fair value’ continues to trend higher, standing at 1.3160 as of today’s open.” “The Canadian jobs numbers should hold very little bearing on USDCAD as has only limited monetary policy implications. The trade balance, on the other hand, has assumed the role of the primary indicator that investors should be watching. Yesterday's numbers were in line with expectations but the details show that CAD weakness is a double-edged sword: import volumes declined suggesting that domestic demand is softening.” “Earlier this week, we noted that GBPCAD was becoming attractive again from the long side. We like this position heading into the super Thursday festivities and over the medium-term, though we see greater near term upside on GBPNZD where policy divergence is expected to be deeply entrenched. Today’s multitude of releases from the BoE presents some near-term risks to these views, but the overall trends still favor sterling strength.” For more information, read our latest forex news.