USDCAD TECHS: Corrective Cycle
- RES 4: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 3: 1.3920 High May 21
- RES 2: 1.3862 High May 29
- RES 1: 1.3854 High Jul 31
- PRICE: 1.3849 @ 18:30 BST Jul 31
- SUP 1: 1.3701/3557 20-day EMA / 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
A short-term correction in USDCAD remains in play. Note that price has traded through the 50-day EMA at 1.3734 and this has been followed by a break of resistance at 1.3798, the Jun 23 high. Clearance of 1.3798 represents an important short-term bullish development, signalling scope for a stronger recovery. Sights are on 1.3862 next, the May 29 high. On the downside, initial firm support to watch lies at 1.3701, the 20-day EMA.
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USDCAD TECHS: Primary Trend Direction Remains Down
- RES 4: 1.4111 High Apr 4
- RES 3: 1.4016 High May 12 and 13 and a key resistance
- RES 2: 1.3920 High May 21
- RES 1: 1.3798 50-day EMA
- PRICE: 1.3662 @ 16:30 BST Jul 1
- SUP 1: 1.3600 Low Jun 30
- 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
The primary downtrend in USDCAD remains intact and short-term gains between Jun 16 - 23 appear to have been corrective. Key support and the bear trigger has been defined at 1.3540, the Jun 16 low. Clearance of this price point would resume the downtrend and open 1.3503, a Fibonacci projection. Any reversal higher would instead signal scope for a stronger retracement. Pivot resistance to monitor is at the 50-day EMA, at 1.3798.
AUDUSD TECHS: Resumes Its Uptrend
- 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: 0.6603 High Nov 11 ‘24
- RES 1: 0.6590 High Jul 01
- PRICE: 0.6565 @ 16:29 BST Jul 01
- SUP 1: 0.6500 20-day EMA
- SUP 2: 0.6453/6373 50-day EMA / Low Jun 23 and a reversal trigger
- SUP 3: 0.6357 Low May 12
- SUP 4: 0.6275 Low Apr 14
The medium-term trend set-up in AUDUSD remains bullish and Monday’s gains strengthen current conditions. The break higher marks a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Sights are on 0.6603 next, the Nov 11 2024 high. Key short-term support has been defined at 0.6373, the Jun 23 low. A pullback would be considered corrective.
US TSYS: Late Japan, India Trade Deal Comments Rattle Markets Briefly
- Treasuries look to finish weaker but off lows - drawing some buy interest after Pre Trump commented on trade deals with Japan and India.
- Bloomberg headlines: "DOUBT WE'LL HAVE DEAL WITH JAPAN" , "ON JULY 9 DEADLINE: NOT THINKING ABOUT EXTENDING" while "SUGGESTS JAPAN COULD PAY 30% OR 35% TARIFF".
- Nikkei spun it a little differently: "US TO HANDLE JAPAN LATER IN TARIFF TALKS, PRIORITIZING INDIA".
- Tsy Sep'25 10Y futures trade -7.5 at 111-28.5 after the bell vs. 111-22.5 low, 10Y yield +.0176 at 4.2456%. Curves remain flatter: 2s10s -3.167 at 47.299, 5s30s -3.900 at 93.654.
- The bull cycle in Treasury futures remains intact, however prices reversed hard off highs into the Tuesday close. As such, the contract has failed on the approach to the next important resistance at 112-15, the 61.8% retracement of the Apr 7 - 11 steep sell-off. Note that the uptrend is overbought, a pullback would unwind this position. First key support to watch is 111-05+, the 20-day EMA.
- Stocks dipped (SPX emini -3.75 at 6250.0) as did US$ slightly after climbing off morning lows into midday high (BBDXY: 1185.43 low / 1191.23 high).
- Looking ahead: Wednesday data focus on MBA Mortgage Applications at 0700ET, Challenger Job Cuts at 0730 followed by ADP Employment Change at 0815ET. No Fed scheduled Fed speakers. Thursday is a heavy data day with NFP added due to Independence Day holiday closure on Friday.
