The odds of a July BoC rate hike jumped to 90% from 86% after Canadian data showed the economy added 45,300 jobs last month, Statistics Canada said, topping forecasts for a gain of 10,000. The unemployment rate dipped to 6.5 percent, its lowest since April.
The rate hike looks like a done deal… Over the last one month, Canada 10-year yield has jumped from 1.373% to 1.88%. The sharp rally also indicates the rate hike has been priced-in to a large extent, even though at least a small part of the rally was fuelled by the sell-off in the German debt.
Meanwhile, the USD/CAD chart shows the pair is oversold as per the 14-day RSI. Once again, I would want to be a intraday buyer around 1.29 handle for an upside objective of 1.30. My stops would be very tight… just 20 pips.