USDCAD TECHS: Bearish Trend Condition
- RES 4: 1.3808 High Nov 3 and a key resistance
- RES 3: 1.3695 Trendline resistance drawn from the Oct 13 high
- RES 2: 1.3571 High Nov 10
- RES 1: 1.3462 50-day EMA
- PRICE: 1.3347 @ 15:23 GMT Nov 17
- SUP 1: 1.3226 Low Nov 15
- SUP 2: 1.3205 61.8% retracement of the Aug 11 - Oct 13 rally
- SUP 3: 1.3139 Low Sep 14
- SUP 4: 1.3023 76.4% retracement of the Aug 11 - Oct 13 rally
USDCAD remains bearish, but trades off recent lows through the London close. Last week’s sell-off resulted in a new multi-month low and confirmed a resumption of the current downtrend. This also marks an extension of the bearish price sequence of lower lows and lower highs. A continuation of the trend would open 1.3205, a Fibonacci retracement. On the upside, key short-term resistance has been defined at 1.3571, the Nov 10 high.
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USDCAD TECHS: Pullback Considered Corrective
- RES 4: 1.4040 76.4% retracement of the 2020 - 2021 bear cycle
- RES 3: 1.4016 3.382 proj of the Aug 25 - Sep 7 - 13 price swing
- RES 2: 1.4000 Psychological round number
- RES 1: 1.3898/3977 High Oct 14 / 13 and the bull trigger
- PRICE: 1.3760 @ 15:32 BST Oct 18
- SUP 1: 1.3640 20-day EMA
- SUP 2: 1.3503 Low Oct 4 and a key support
- SUP 3: 1.3387 50-day EMA
- SUP 4: 1.3358 Low Sep 21
USDCAD started the week on a bearish note and fully reversed Friday’s gains. Despite the pullback, the uptrend remains intact. The latest recovery from 1.3503, Oct 10 high, reinforces bullish conditions and this low represents a key short-term support. Moving average studies continue to highlight an uptrend and 1.3838, the Sep 30 high and key resistance has been cleared, strengthening bullish conditions. Support to watch is 1.3640, the 20-day EMA.
US TSYS: Sovereign Issuance, BOE Gilt Sale Annc Weighs on Tsys
Inside range session for Tsy - well off late morning lows after the bell, US$ index midrange (DXY +.050 at 112.089) while stocks are firmer, they remain off highs after Apple annc production cuts for IPhone.
- Tsys extended session lows in late morning trade - partially tied to larger than expected $5B Saudi 2pt debt issuance as participant hedged/rate locked prior to launch after noon hour.
- Rates staged a modest midday rebound until reversing lower again after BoE confirms resumption of Gilt sales to November 1. Review: Bonds had extended highs overnight after FT article reported the BoE would pause Gilt sales past current Oct 31 resumption date. Bounce short-lived as rates steadily pared gains after the BOE issued statement the FT article was "inaccurate".
- Limited reaction to earlier data: INDUSTRIAL PROD +0.4%; CAP UTIL 80.3%; NAHB HOUSING MARKET INDEX 38 well below 43 est. Later this afternoon: Net Long-term TIC Flows ($21.4B, --) Total Net ($153.5B, --) at 1600ET.
- Fed Speakers: Nothing new from Atlanta Fed Bostic: INFLATION `TOO HIGH', HAVE TO GET `UNDER CONTROL' Bbg, while MN Fed Kashkari speaks on economy participates in moderated Q&A at 1730ET.
- Reminder: Fed goes into media Blackout at midnight Friday, through Nov 3, day after the next FOMC policy annc.
CANADA: CIBC See Below Consensus CPI Inflation
- CIBC see headline CPI inflation easing from 7.0% to 6.5% Y/Y in Sept (cons 6.8%) on the back of an unadjusted -0.2% M/M decline.
- The trend in ex food/energy prices is once again likely to be more subdued in Canada than in the US, thanks largely to the differing treatment of shelter costs: homeowner replacement and other housing components of CPI will remain weak M/M as home prices fall and building costs no longer rise.
- Of the volatile items, gasoline prices were lower in Sept on average, partly offset by higher food prices, but will likely have moved higher in Oct to see headline accelerate again for one month at least.
