Forex: USD/CAD erases losses back to 1.0070 ahead of NY opening

FXstreet.com (Barcelona) - From 1.0050 low by the end of the European morning, the USD/CAD pulled back and fully retraced its losses to 1.0070 on the back of weaker US employment figures than expected in April, as well as a revision lower in March. The US ADP report is a valuable indicator ahead of Friday’s NFP report.

The US ADP employment report came in lower than expected, at 119K in April instead of the 150K expected, also with the March figure being revised lower from 158K to 131K. Next in line is US manufacturing PMI in April. For the ISM we see a slight downside risk and are looking for an outcome of 50.4 (mkt 50.7), which would leave the ISM at its lowest level since November 2012”, wrote TD Securities analyst Annette Beacher, expecting a shift to an easing bias on the FOMC meeting due to the rising uncertainty about the impact of fiscal austerity on growth and further moderation in core inflationary pressures.

“On the charts, the USD looks heavy and the 200-day MA around par looks tantalizingly close. The market has been in a one-way street this week though without any correction so the chance of a modest squeeze up may be rising. Minor support is 1.0025/30”, wrote TD Securities analysts.