USDCAD TECHS: Corrective Pullback
- RES 4: 1.2964 High Dec 20 2021
- RES 3: 1.2936 2.0% 10-dma envelope
- RES 2: 1.2901 High Mar 8
- RES 1: 1.2880 High Apr 28
- PRICE: 1.2804 @ 16:59 BST Apr 29
- SUP 1: 1.2648 50-day EMA
- SUP 2: 1.2568 Low Apr 22
- SUP 3: 1.2459 Low Apr 21
- SUP 4: 1.2403 Low Apr 5 and a key support
USDCAD remains bullish and added to the week’s gains Thursday. However, the pullback from 1.2880, Thursday’s high, highlights potential for a short-term correction. A key near-term support lies at 1.2648, the 50-day EMA. A clear break of this support is required to suggest scope for a deeper pullback. For bulls, a resumption of gains would refocus attention on 1.2901, the Mar 8 high. This is also the bull trigger.
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USDCAD TECHS: Through Key Support
- RES 4: 1.2778 High Mar 16
- RES 3: 1.2699 High Mar 17
- RES 2: 1.2667 50-day EMA
- RES 1: 1.2593/2625 High Mar 28 / 20-day EMA
- PRICE: 1.2475 @ 16:36 GMT Mar 30
- SUP 1: 1.2430 Low Mar 30
- SUP 2: 1.2420 1.0% 10-dma envelope
- SUP 3: 1.2387 Low Nov 10 2021
- SUP 4: 1.2328 Low Oct 29 2021
Trend conditions were confirmed further Wednesday, pushing USDCAD through key support at 1.2454 - the Jan 19 low. This extends the downtick triggered by the break below 1.2552, 76.4% of the Jan 19 - Feb 24 rally, reinforcing a bearish theme in the process. The break lower opens 1.2387 initially ahead of 1.2328. On the upside, initial firm resistance is seen at 1.2625, the 20-day EMA. A break of this average would ease bearish pressure.
US TSY FUTURES: BLOCK, Late 5Y Buy
- +5,000 TYM2 114-19.25 (+7), buy through 114-19 post-time offer at 1545:28ET
US TSYS: Waiting For Fri's March Jobs Data
FI markets traded higher by the closing bell, inside range on robust volumes (TYM2>1.5M). Yield curves gradually scaled back early steepening, mixed after the bell. After briefly inverting Tuesday, 5s30s hit +5.122 high and finished around 3.33 +3.28.
- Aside from mixed geopol headlines re: Russia/Ukraine, KC Fed George generated some interest after midday after mentioning "FED BALANCE SHEET SIZE NEEDS TO DECLINE SIGNIFICANTLY ... while "ROLLING OFF FED ASSET HOLDINGS COULD HELP STEEPEN CURVE" Bbg.
- George said it's clear that removing accommodation is required and laid out a more cautions stance on raising the federal funds rate, paired with a desire to roll assets off of the central bank's balance sheet faster.
- "Given the state of the economy, with inflation at a 40-year high and the unemployment rate near record lows, moving expeditiously to a neutral stance of policy is appropriate," she said, characterizing recent inflation as a result of supply constraints in the face of strong demand.
- Little/no react to March ADP +455 vs. +450 est, +6.9%. Thursday data focus on weekly claims (+196k est), Personal income/spending at 0830ET; Chicago PMI (57.0 vs. 56.3 prior) at 0945ET.
- The 2-Yr yield is down 4.4bps at 2.3204%, 5-Yr is down 5.8bps at 2.4399%, 10-Yr is down 4.6bps at 2.3488%, and 30-Yr is down 2.8bps at 2.4735%.
