USDCAD TECHS: Bear Cycle Intact
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4111 High Apr 4
- RES 2: 1.3965/1.4016 50-day EMA / High May 12 and 13
- RES 1: 1.3866 20-day EMA
- PRICE: 1.3828 @ 08:12 BST May 30
- SUP 1: 1.3686 Low May 26
- SUP 2: 1.3643 Low Oct 9 ‘24
- SUP 3: 1.3579 1.500 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
A downtrend in USDCAD remains intact and short-term gains are considered corrective. Initial resistance to watch is 1.3866, the 20-day EMA. Resistance at the 50-day EMA is at 1.3965 - a key level. The pair has recently breached support at 1.3751, the May 6 low. This confirmed a resumption of the downtrend and has maintained the sequence of lower lows and lower highs. Sights are on 1.3643 next, the Oct 9 2024 low.
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SWITZERLAND DATA: Largest KOF Drop Since March 2022
The Swiss KOF Economic Barometer fell by 6.1 points in April, to 97.1, below consensus of 101.9 and the most pronounced drop since March 2022. This is the first time the indicator is in contractionary territory since December 2024.
- “In particular, the indicator bundle for manufacturing experiences a strong setback. Similarly, the indicator bundles for other services and hospitality are under downward pressure. Solely the level of the indicator bundle for financial and insurance services remains nearly unaltered.”
- Note that by comparison, German sentiment fared comparatively well post-US tariff announcement - the IFO business barometer unexpectedly rose in April; today's release underscores Switzerland's material export exposure (also note that the country will face a high 31% reciprocal tariff in case these will go into effect following the recent 90-day pause). The SNB already noted downside risks to their most recent 1.0-1.5% 2025 growth forecast.
GERMAN DATA: Retail Sales Keep Open Positive Consumer Spending GDP Contribution
German March retail sales came in at -0.2% M/M (real, seasonally-adjusted) and +2.2% Y/Y in March. That follows February's +0.2% M//M (downwardly revised but already known from +0.8%) and January's +0.7% M/M - meaning that while retail sales did not have an overly strong Q1, consumer spending should have the potential for a slightly positive contribution in the flash Q1 GDP data, to be published at 09:00 BST/10:00 CEST. Consensus for that stands at +0.2% Q/Q total.
- Looking at the individual categories, March's decrease appears driven by non-food sales at -0.6% M/M, while food sales were +0.3% M/M. Internet and mail orders stood out positively, at +0.6% M/M, Destatis adds - on a yearly comparison, growth in the sector is notable, at +9.5% Y/Y.
- Looking ahead, consumer sentiment has outperformed expectations recently; while improving despite the US tariff announcements, it remains overall weak.
MNI: SWISS KOF APR ECONOMIC BAROMETER 97.1
- MNI: SWISS KOF APR ECONOMIC BAROMETER 97.1
