CANADA: CAD Reaction Limited Compared To Sharp FI Sell-Off Post BoC Surprise
- USDCAD hovers between 1.334-1.335 (-0.4%) as moves settle down after the BoC’s hike, fading the latest extension of a relentless sell-off in GoCs/rates.
- It touched a low of 1.3322 immediately on the decision, shunting through 1.3363 (May 11 low) but stopping short of testing a key near-term support at 1.3315 (May 8 low).
- Having appeared to have already seen a sizeable trimming of CAD net shorts in weeks ahead of the decision, FX reaction has been more limited with CAD back only mid-pack on the day after second from bottom pre-decision.
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MNI:US MAR WHOLESALE INV 0%; SALES -2.1%
- MNI:US MAR WHOLESALE INV 0%; SALES -2.1%
GBPUSD TECHS: Bull Cycle Extends
- RES 4: 1.2877 High Apr 25 2022
- RES 3: 1.2767 61.8% of the Jun 1 ‘21 - Sep 26 ‘22 downtrend
- RES 2: 1.2733 2.0% 10-dma envelope
- RES 1: 1.2669 Intraday high
- PRICE: 1.265 @ 14:43 BST May 8
- SUP 1: 1.2548/2478 Low May 4 / 20-day EMA
- SUP 2: 1.2436 Low May 2
- SUP 3: 1.2353/45 Low Apr 17 / 10
- SUP 4: 1.2275 Low Apr 3
The trend outlook in GBPUSD remains bullish and a fresh cycle high today reinforces current conditions. The pair last week traded through 1.2599, the Jun 7 2022 high and the focus is on 1.2733 next, the top of a MA envelope study. A bullish price sequence of higher highs and higher lows remains intact and moving average studies are in a bull mode position. Support to watch is at the 20-day EMA, which intersects at 1.2478.
US 10YR FUTURE TECHS: (M3) Starting The Week On A Softer Note
- RES 4: 118-00 Round number resistance
- RES 3: 117-29+ High Aug 26 2022 (cont)
- RES 2: 117-01+ High Mar 24 and bull trigger
- RES 1: 116-12/117-00 High May 5 / 4
- PRICE: 115-08 @ 14:41 BST May 8
- SUP 1: 114-25+ 50-day EMA
- SUP 2: 114-10 Low May 1
- SUP 3: 113-30+ Low Apr 19 and a ley support
- SUP 4: 113-26 Low Mar 22
Treasury futures have started the week on a bearish note and are trading lower today, extending the pullback from last week’s high of 117-00, on May 4. Price has breached the 20-day EMA and attention shifts to support at the 50-day EMA which intersects at 114-25+. A clear break of this average would signal scope for a deeper retracement. For bulls, a resumption of gains would open key resistance at 117-01+, the Mar 24 high. This is the bull trigger.
