USDCAD TECHS: Approaching Resistance At The 50-Day EMA

The AUD/USD had a range overnight of 0.6614-0.6646, Asia is trading around 0.6620. The AUD stalled toward the 0.6650 area and was unable to hold above the 0.6630 break. US yields continue to rise as we approach the FOMC and Equities have slipped a little in response. The AUD price action remains very constructive but it could not ignore the pullback in the USD. While the AUD remains above 0.6500-0.6550 I suspect dips should continue to be supported. In the Asian session, the main focus will be on the RBA today with the market looking for any hawkish confirmation. It has come a long way very quickly so a pullback is not out of the question, first support is toward 0.6570/90 where we should see demand reappear. Ultimately the AUD is looking to rebuild momentum to have another look back toward the 0.6700 area at some point. 

• MNI RBA Preview - With October trimmed mean inflation printing at 3.3%, the RBA is unanimously expected to be on hold at its December meeting. The strength of the data since the November meeting plus inflation rising further above the top of the band increases the chance that the RBA now sees risks skewed to the upside and as a result it may sound more hawkish and at a minimum will remain “cautious”. 
• RBA-dated OIS pricing is showing the probability of a 25bp hike rising from 2% today to 105% by August and 141% by December 2026.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6630(AUD621m), 0.6635(AUD714m). Upcoming Close Strikes : 0.6550(AUD1.59b Dec 11) - BBG
• The AUD/USD Average True Range for the last 10 Trading days: 39 Points
• Data/Event: NAB Business Confidence, RBA

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

• RES 4: 0.6723 High Oct 21 ‘24   
• RES 3: 0.6707 High Sep 17 and a key resistance 
• RES 2: 0.6660 High Sep 18
• RES 1: 0.6649 High Dec 5
• PRICE: 0.6622 @ 16:45 GMT Dec 8 
• SUP 1: 0.6580/6543 High Nov 13 / 20-day EMA 
• SUP 2: 0.6517 Low Nov 27 
• SUP 3: 0.6466/21 Low Nov 26 / 21 
• SUP 4: 0.6415 Low Aug 21 / 22 and a bear trigger 

A strong impulsive bull wave in AUDUSD remains intact, having printed 10 consecutive sessions of higher highs. Recent gains have cleared a number of important resistance points, strengthening a bull theme and highlighting scope for a continuation higher. 0.6640, 76.4% of the Sep 17 - Nov 21 bear leg, has been pierced This opens 0.6707, the Sep 17 high and key resistance. Key support to watch is at 0.6543, 20-day EMA.