CANADA: Jobs Preview: Canada Analysts See Between Zero And 35k Job Gains (2/2)

• RES 4: 1.4111 Apr 10  
• RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg 
• RES 2: 1.3920 High May 21
• RES 1: 1.3879 High Aug 1
• PRICE: 1.3782 @ 16:51 BST Aug 5
• SUP 1: 1.3716/3557 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 bullish corrective phase in USDCAD remains in play despite sharp weakness Friday. On the recent run higher, price traded through the 50-day EMA at 1.3739 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, signaling scope for a stronger recovery. Sights are on 1.3920 next, the May 21 high. On the downside, initial firm support to watch lies at 1.3716, the 20-day EMA.    

• Treasuries look to finish mixed Tuesday, curves twisting flatter (2s10s -3.504 at 48.004) w/ 2s-10s down 2.5-4 following stagflationary July's ISM Services data and a weak 3Y auction that drew 3.669% high yield vs. 3.662% WI.
• The headline Services PMI reading fell by 0.7 points to 50.1 (51.5 expected, 50.8 prior), merely a 2-month low but suggesting that an expected pickup in momentum and sentiment is not materializing.
• Meanwhile, S&P Global final PMIs for July were stronger than first thought, with the services PMI further confirming a fresh high since December. The soon to be released ISM Services will provide a useful alternative indicator for services activity in July after undershooting by 2.1pts back in June.
• The USD Index remained rangebound Tuesday, however the inability of markets to press the USD lower still after Friday's NFP print may suggest the price is building a base. The JPY was the poorest performing currency against all others in G10, aiding EUR/JPY to recovery back toward Y171.
• Trump spoke on his possible Fed picks to replace Kugler following her resignation over the weekend. The President declared he had a shortlist of 4, which includes both Kevin Warsh and Kevin Hassett, and while the President said he may use this Fed pick as a precursor to selecting the next Fed chair, he remained vague about the timing of such an announcement.

• 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: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing  
• RES 1: 0.6530/6625 High Jul 29 / 24 and the bull trigger
• PRICE: 0.6465 @ 16:51 BST Aug 5
• SUP 1: 0.6419 Low Aug 1
• SUP 2: 0.6373 Low Jun 23 and a bear trigger 
• SUP 3: 0.6354 38.2% retracement of the Apr 9 - Jul 24 upleg  
• SUP 4: 0.6323 Low Apr 16

AUDUSD rallied well off the week’s lowest levels last week on broad USD weakness. Last week, the pair traded through both the 20- and 50-day EMAs. This undermined the recent bullish theme and signals the likely start of a corrective cycle. Note that support 0.6455 the Jul 17 low, has also been cleared. The breach strengthens a bearish threat and signals scope for an extension towards 0.6373, the Jun 23 low. Key resistance has been defined at 0.6625 the Jul 24 high. It also represents the bull trigger.