USDCAD TECHS: Hits Bear Trigger, New Cycle Low
- RES 4: 1.4415 High Apr 1
- RES 3: 1.4296 High Apr 7
- RES 2: 1.4087 50-day EMA
- RES 1: 1.3906/3935 High Apr 17 / 20-day EMA
- PRICE: 1.3793 @ 17:00 BST May 2
- SUP 1: 1.3760 Low Apr 21 and the bear trigger
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
The trend set-up in USDCAD deteriorated further Friday, with prices slipping through the bear trigger to narrow the gap with next support. The fresh cycle low reinforces the bear cycle and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear mode position, highlighting a dominant downtrend. First resistance to watch is 1.3943, the 20-day EMA.
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STIR: Fed Cut Pricing Pared Ahead Of Tariff Announcement
Futures-implied Fed rate cut pricing is off session highs as we await the White House's tariff announcement (link to livestream here). Dec Fed funds are currently implying around the fewest cuts seen this week, around 71bp, vs around 78bp this morning, with the pullback coming alongside a nascent risk-on move in equities ahead of the Trump event.
- That's still close to 3 cuts implied, but the first cut is only fully priced by July (2 meetings from now), with the second in October.
- Also potentially of note though overshadowed by the tariffs announcement is commentary scheduled at 1630ET by Fed Governor Kugler (permanent voter) on inflation expectations and policymaking (text + Q&A expected).
| Meeting | Current FF Implieds (%), LH | Cumulative Change From Current Rate (bp) | Incremental Chg (bp) | Yest (Apr 01) |
| May 07 2025 | 4.30 | -3.5 | -3.5 | 4.28 |
| Jun 18 2025 | 4.17 | -16.3 | -12.8 | 4.12 |
| Jul 30 2025 | 4.02 | -31.3 | -15.0 | 3.96 |
| Sep 17 2025 | 3.86 | -47.5 | -16.2 | 3.79 |
| Oct 29 2025 | 3.75 | -57.7 | -10.2 | 3.69 |
| Dec 10 2025 | 3.63 | -70.5 | -12.8 | 3.57 |
| Jan 28 2026 | 3.57 | -76.2 | -5.7 | 3.52 |
| Mar 18 2026 | 3.48 | -84.6 | -8.4 | 3.44 |
USDCAD TECHS: Monitoring Support
- RES 4: 1.4700 Round number resistance
- RES 3: 1.4641 76.4% retracement of the Feb 3 - 14 bear leg
- RES 2: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- RES 1: 1.4415 High Apr 1
- PRICE: 1.4313 @ 17:07 BST Apr 2
- SUP 1: 1.4235 Low Mar 26
- SUP 2: 1.4151 Low Feb 14 and a bear trigger
- SUP 3: 1.4107 50.0% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 4: 1.4011 Low Dec 5 ‘24
USDCAD traded sharply lower Tuesday. Attention is on an important short-term support at 1.4235, the Mar 26 low. A clear break of this level would undermine the bull theme and highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger. Note that moving average studies continue to highlight a dominant uptrend. A resumption of gains would refocus attention on the bull trigger at 1.4543, the Mar 4 high.
US TSYS: Tsy Yields Higher Ahead Tariff Annc, ADP Gains Ahead NFP
- Treasury futures are trading weaker but off lows after the bell, main focus on this afternoon's reciprocal tariff announcement from the White House, scheduled for 1600ET. Much speculation through the day from ending tariffs on cheap (under $800) China imports to a 3-tier plan first mentioned by the WSJ on March 18.
- Treasuries rallied after this morning's higher than expected ADP private jobs gain but retreated in steps off midmorning highs as stocks staged a modest rally off lows. ADP employment growth was stronger than expected in March at 155k (cons 120k) after a marginally upward revised 84k (initial 77k) in February.
- Treasurys extended session lows after Politico headlines announce that Elon Musk will step back from "governing partner" role in the next few weeks. Several new outlets have announced over the last couple days that Musk would be stepping down from DOGE by the end of May.
- Treasuries Jun'25 10Y contract currently trades 111-17 (-8) vs. 111-09 low, technical support below at 110-26.5 (20-day EMA), compares to morning high of 112-02.5 with technical resistance above at 112-13 (1.500 proj of the Jan 13 - Feb 7 - Feb 12 price swing). Curves are mildly flatter, off early week highs: 2s10s -.127 at 28.245, 5s30s -1.002 at 58.799.
- Cross asset update: stocks bounce (SPX eminis +18.5 at 5693.00), Bbg US$ index -2.59 at 1270.69, Gold higher at 1325.93, crude firmer (WTI +.61 at 71.81).
