USDCAD TECHS: Bear Cycle Extension

• RES 4: 1.4051 High Nov 28 
• RES 3: 1.4015 High Dec 2 ‘25
• RES 2: 1.3985 76.4% retracement of the Nov 5 ‘25 - Jan 30 bear leg
• RES 1: 1.3967 High Mar 31
• PRICE: 1.3886 @ 16:46 BST Apr 1
• SUP 1: 1.3845 Low Mar 27 
• SUP 2: 1.3753 High Mar 3 and a recent breakout level 
• SUP 3: 1.3670 Low Mar 23 and a key short-term support
• SUP 4: 1.3526 Low Mar 09

A bull cycle in USDCAD remains in play and this week’s extension reinforces current trend conditions. Recent gains have resulted in a break of key resistance at 1.3753, the Mar 3 high, highlighting a short-term reversal. An important resistance at 1.3929, the Jan 16 high, has been pierced. A clear break of this hurdle would open 1.3985, a Fibonacci retracement. Initial firm support to watch lies at 1.3670, the Mar 23 low.   

• Treasuries look to finish near session lows after trading stronger late overnight. Focus on Pres Trumps address to nation tonight re: Iran war.
• Recent pivot in messaging suggests the White House is looking to build an off-ramp to the war. It is unclear what Trump intends to say, but evidence is mounting that Trump is edging towards declaring a military victory that could lay the groundwork for a demobilisation of US forces.
• Limited market reacting to the "letter to Americans" from Iranian President Pezeshkian: Iran "NEVER PURSUED 'AGGRESSION' .. HARBORS NO ENMITY TOWARD ORDINARY AMERICANS .. TELLS AMERICANS TO LOOK PAST RHETORIC" Bbg. Full text is here
• March's ISM Manufacturing Report posted another solid set of activity readings, but came with another indication of soaring inflation. The data and anecdotal commentary provide some evidence that the conflict in the Middle East is already hampering supply chains and pushing up input costs.
• TYM6 currently -4.5 at 110-29 vs. 110-27.5 low / 111-14.5 high. The bear trigger is 109-24, the Mar 27 low. A break would resume the downtrend.
• Cross asset update: Bloomberg US$ index weaker (BBDXY -3.32 at 1212.13); equities near highs: SPX emini +.91%, Nasdaq +1.3%, DJIA  +0.7%, WTI crude -1.87% below $100/bbl.
• LOOK AHEAD: Thursday Data Calendar: Wkly Claims, Trade Bal, Imp/Exp, Fed Speak

• This month’s household survey should be a somewhat cleaner read than February, which owing to a delay stemming from last year’s government shutdown unusually included a revision for the population control back on January levels.
• Indeed, understanding February dynamics depends largely on figuring in the annual revisions, though overall February's household report looked largely weak.
• We’ll watch participation rates, with the overall rate expected to edge up to 62.1% from 62.05% in Feb, after a marked downward revision to 62.1% back in January from the 62.5% first reported (due to revised demographics) which meant the lowest since late 2021 as opposed to a nine-month high.
• Elsewhere, we watch the underemployment rate which puzzled in February as it fell for a third consecutive month to 7.9% for its lowest since Jul 2025, most recently helped by the largest drop in those working part-time for economic reasons since mid-2022.