USDCAD TECHS: Gains Highlight A Doji Candle Reversal Pattern
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
- RES 2: 1.4111 High Apr 10
- RES 1: 1.4039/80 High Oct 24 / 16 and the bull trigger
- PRICE: 1.4002 @ 13:28 GMT Oct 30
- SUP 1: 1.3888 Low Oct 29 and key short-term support
- SUP 2: 1.3844 Bull channel base drawn from the Jul 23 low
- SUP 3: 1.3769 Low Sep 19
- SUP 4: 1.3727 Low Aug 29 and a bear trigger
A strong rally today in USDCAD highlights a reversal of the corrective bear leg between Oct 14 - 29. Note that the climb suggests that yesterday's candle - a doji - is a valid pattern and therefore a potential reversal signal. Moving average studies remain in a bull-mode position highlighting a dominant uptrend. A continuation higher would open 1.4080, the Oct 16 high and a bull trigger. Key short-term support is at 1.3888, the Oct 29 low.
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EQUITIES: US Cash Opening Calls
US Cash Opening Calls, set for a flat Open.
- Fair values seen at: SPX: 6,664.5 (+0.0%); DJIA: 46,310 (-0.0%/-6pts); NDX: 24,641.3 (+0.1%).
ECB: Lagarde Repeats ECB "Well Placed" At 2%
Lagarde strikes a confident tone in her keynote speech in Helsinki today on "Trade wars and central banks: lessons from 2025". Link here, key highlights below:
- "With no retaliation and an appreciating exchange rate, tariffs have had little inflationary impact so far, with their adverse effects mainly limited to growth. Those effects, however, have been relatively moderate thanks to the domestic response."
- "I have said that we are in a good place [...] there are also three additional reasons why it applies to the current situation." She goes on to mention a lack of policy trade-offs because of little new inflationary pressures, inflation risks appearing contained, and the ECB being well placed at 2% to respond to new shocks as reasons.
- "For our part, we cannot pre-commit to any future rate path, whether one of action or inaction. We must remain agile, and ready to respond to the data as they come in."
- "We can take comfort in having overcome a large inflation shock after the pandemic, and in how the economy has coped so far with an upheaval in trade relations.
- "We must remain alert to the possibility that not all the consequences are visible today – and that new shocks may still lie ahead.
EUROPEAN INFLATION: German National Indeed Sees Higher Energy And Services
The main categories of the German national-level data show higher energy and services inflation, as expected following the state-level data out earlier today:
- Energy moved up as expected, to -0.7% (-0.7% MNI tracking, -2.4% prior) amid base effects.
- Services accelerated even more than we had thought, to 3.4% (3.3% MNI tracking), the first uptick after two consecutive prints at 3.1%. The Bundesbank sees the category continuing to rise towards the end of the year on the back of travel price base effects.
- This led core CPI to speed up to 2.8% Y/Y (2.8% MNI tracking, 2.7% prior). The category stood at 2.7% for three consecutive months previously.
- Food came in lower than before, meanwhile, at 2.1% Y/Y (MNI tracking was incl. alcoholic beverages and was also for a deceleration, 2.5% prior). This is the lowest rate since June. As mentioned previously, the category arguably stands under elevated scrutiny following a recent ECB post on its importance for inflation expectations.
