BOC: MNI BoC Review-Jun 2026 - Retaining Message Of Flexibility

• RES 4: 1.4015 High Dec 2 ‘25
• RES 3: 1.3985 76.4% retracement of the Nov 5 ‘25 - Jan 30 bear leg
• RES 2: 1.3878/3967 High Apr 13 / High Mar 31 and the bull trigger
• RES 1: 1.3713 50-day EMA 
• PRICE: 1.3666 @ 16:56 BST May 11
• SUP 1: 1.3550/26 Low May 1 / Low Mar 9
• SUP 2: 1.3502 1.0% 10-dma envelope
• SUP 3: 1.3482 Low Jan 30 and key support
• SUP 4: 1.3420 Low Sep 25 

Despite a continuation of the recent recovery in USDCAD, the trend condition remains bearish and the latest recovery appears corrective. Initial firm resistance is seen at 1.3713, the 50-day EMA. A clear break of this average is required to signal a possible S/T reversal. A resumption of weakness would pave the way for a move towards 1.3526, the Mar 9 low and the next key support. A clear break of this level would open 1.3482, the Jan 30 low.

• Kalshi betting has a forecast of a slightly ‘low’ 0.6% M/M for headline CPI in April, broadly echoing the 0.56% M/M median unrounded estimate we've seen.
• Similarly, Kalshi betting sees core CPI between 0.3-0.4% M/M for close to the median 0.36% M/M unrounded estimate.
• The market remains very thin, especially when it comes to core M/M estimates. 

• The Cleveland Fed nowcast has headline CPI at 0.45% M/M, adding to the downside risk that the unrounded estimates already suggest to Bloomberg consensus of 0.6% M/M.
• A large part of this looks to come from softer core CPI tracking, at just 0.21% M/M, which we suspect might be missing the rental inflation component (seen by some to add 10bps to core CPI inflation).
• The core nowcast has been impressively accurate in the previous two months, exactly right in March at 0.20% M/M and just 1bp lower than the realized 0.22% M/M in February.