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Reasons to Short AUD/CAD in 2011 are just that simple:

1) We know RBA-BOC rate is correlated with AUD/CAD:

The Rate spread, 375 bps, is now 200 bps (or 1.5 S.D.) above average (since 1993) and just 50 bps below the peak at 475 bps.  =>  Risk-to-Reward basis for shorting AUD/CAD.

2. CA Unemployment Rate - AU Unemployment (which is near the peak now) vs AUD/CAD:  (- Fairly correlated)

We know that US unemployment (thinner line) is going to decline in 2011 (given GDP at 3.5%-4%). We can expect CA unemployment would drop relatively to AU.