USDCAD TECHS: Bullish Trend Structure

• RES 4: 1.3920 High May 21  
• RES 3: 1.3862 High May 29 
• RES 2: 1.3798 High Jun 23  
• RES 1: 1.3729/74 50-day EMA / High Jul 17 
• PRICE: 1.3730 @ 19:47 BST Jul 28
• SUP 1: 1.3557 Low Jul 03
• SUP 2: 1.3540 Low Jun 16 and the bear trigger
• SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
• SUP 4: 1.3473 Low Oct 2 2024

Despite a recovery from last week’s lows and a further phase of strength Monday, the trend needle in USDCAD continues to point south and short-term gains appear corrective. Markets have traded either side of resistance at 1.3728, the 50-day EMA. A clear break of this average is required to highlight a possible stronger short-term reversal. For bears, sights are on key support at 1.3540, the Jun 16 low. Clearance of this level would confirm a resumption of the downtrend.  

• RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
• RES 3: 0.6688 High Nov 7 ‘24
• RES 2: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing  
• RES 1: 0.6625 High Jul 24
• PRICE: 0.6517 @ 19:45 BST Jul 28
• SUP 1: 0.6513 Low Jul 28
• SUP 2: 0.6505/6455 50-day EMA / Low Jul 17  
• SUP 3: 0.6373 Low Jun 23 and a bear trigger  
• SUP 4: 0.6357 Low May 12

Last week’s fresh trend highs in AUDUSD reinforce bullish conditions and the latest pullback is considered corrective. Gains have resulted in a print above key short-term resistance at 0.6595, the Jul 11 high and bull trigger. This marks a resumption of the uptrend and sights are on 0.6688, the Nov 7’ 24 high. Support to watch is at the 50-day EMA, at 0.6505. A clear break of this EMA would highlight a stronger reversal.       

Treasury's estimates of privately-held net marketable borrowing for the July - September 2025 and October - December 2025 quarters released Monday were almost exactly in line with MNI's estimates (Sources and Uses Table here - PDF). 

• We would characterize the current quarter borrowing estimates as slightly on the high side of the median analyst expectation, with the latter quarter fairly close to expectations given what is usually a wide range for the further-out quarter. As such this should have little to no impact on expectations for Wednesday's Refunding announcement.
• For the Jul-Sep quarter, Treasury expects a $525B financing need (MNI expected $532B) with a $1007B borrowing requirement (MNI expected $1000B), with cash rising $393B to $850B by quarter-end (in line with consensus). Analyst borrowing requirement estimates for this quarter ranged from $942B - $1,087B.
• This represents a borrowing estimate $60B higher than announced in April's refunding, when excluding the cash raise that is now expected following the lifting of the federal debt limit ($453B more borrowing this quarter on $393B more cash by end-quarter).
• For the Oct-Dec quarter, Treasury expects a $494B financing need (MNI expected $525B) with a $590B borrowing requirement (MNI expected $600B), with cash remaining at $850B at quarter-end. Analyst borrowing requirement estimates for this quarter ranged from $534B - $726B.
• Note that regarding the April-June quarter, "excluding the lower than assumed end-of-quarter cash balance, actual borrowing was $56 billion lower than announced in April".