USDCAD TECHS: Continues To Appreciate
- RES 4: 1.3655 High May 26 and a key resistance
- RES 3: 1.3585 High Jun 1
- RES 2: 1.3528 High Aug 16
- RES 1: 1.3523 76.4% retracement of the May 26 - Jul 14 downleg
- PRICE: 1.3525 @ 17:16 BST Aug 16
- SUP 1: 1.3413 Low Aug 11
- SUP 2: 1.3351 20-day EMA
- SUP 3: 1.3320 Low Aug 4
- SUP 4: 1.3266 Low Aug 2
USDCAD short-term conditions remain bullish and the pair is trading higher. Attention is on 1.3523, a Fibonacci retracement point - a level pierced, but yet to be broken. Clearance of this level would strengthen current bullish conditions and pave the way for a climb towards 1.3585, the Jun 1 high. Initial firm support to watch is 1.3351, the 20-day EMA. A short-term pullback would be considered corrective and this would allow an overbought condition to unwind.
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USDCAD TECHS: Friday Bounce Confirmed as Corrective
- RES 4: 1.3387 High Jul 7 and a key resistance
- RES 3: 1.3361 50-dma
- RES 2: 1.3304 High Jul 10
- RES 1: 1.3251 20-day EMA
- PRICE: 1.3170 @ 15:49 BST Jul 17
- SUP 1: 1.3084 1.618 proj of the Apr 28 - May 8 - May 26 price swing
- SUP 2: 1.3032 1.764 proj of the Apr 28 - May 8 - May 26 price swing
- SUP 3: 1.2992 50.0% retracement of the 2021 - 2022 bull leg
- SUP 4: 1.2949 2.00 proj of the Apr 28 - May 8 - May 26 price swing
USDCAD traded lower again early Friday before bouncing into the close. The subsequent weakness into the Monday close confirms the move higher as corrective in nature, keeping the medium-term trend pointed lower for now. Last week’s move lower resulted in a break of 1.3117, the Jun 27 low. This confirms a resumption of the downtrend that started on Oct 13 2022. The break lower opens 1.3084, and 1.3032, Fibonacci projection points. The 1.0% 10-dma envelope has been pierced for the first time since mid-June, signalling the extent of the current downside momentum. Firm resistance is seen at 1.3251, the 20-day EMA.
US TSYS: Markets Roundup: Narrow Inside Range to Start New Week
- Typical summer session, muted action after last last week's full docket of CPI, PPI and Retail Sales. Light volumes with Japan out for one day holiday, Treasury futures traded inside narrow session range, 5s-10s outperforming mildly lower intermediates by the close. Curves a touch flatter.
- Limited reaction to small beat for July Empire Fed manufacturing index as it dipped to +1.1 (cons -3.5) after +6.6, close compared to some recent surprises.
- Remember this is a particularly volatile measure, with a standard deviation for its monthly change since 2021 at a very wide 23pts (and 28pts since 2022), but two months at broadly similar levels has been unusual compared to its typical pattern of lurching lower again.
- The Federal Reserve is in media blackout in regards to policy, through July 27, the day after the next FOMC.
- Projected rate hike expectations holding steady: July 26 FOMC is 93.6% w/ implied rate of +23.4bp to 5.313%. September cumulative of +26.6bp at 5.345%, November cumulative of 32.1bp at 5.399%, and December cumulative of 25.8bp at 5.337%. Fed terminal holding at 5.40% in Nov'23.
AUDUSD TECHS: Fade Off Highs, But Bull Rally Still Holds
- RES 4: 0.7029 High Feb 14
- RES 3: 0.6993 76.4% retracement of the Feb 2 - May 31 bear leg
- RES 2: 0.6936 High Feb 16
- RES 1: 0.6900 High Jun 16 and key resistance
- PRICE: 0.6812 @ 15:44 BST Jul 17
- SUP 1: 0.6784 Low Jul 13
- SUP 2: 0.6713 20-day EMA
- SUP 3: 0.6651 Low Jul 11
- SUP 4: 0.6596 Low Jun 29 and key support
A strong impulsive rally in AUDUSD last week resulted in the break of a number of key short-term resistance points. The move highlights a stronger short-term bullish theme and price remains within range of resistance at 0.6900, the Jun 16 high. A break of this level would open 0.6936, the Feb 16 high. Initial support lies at Thursday’s intraday low of 0.6784. A firmer level lies at 0.6713, the 20-day EMA.
