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The USDCAD bullish trend condition strengthened further Friday, with the pair topping key resistance at the Mar 10 high of 1.3862. This week’s climb was triggered by a break of key resistance at 1.3786, the Oct 5 high. This strengthened bullish conditions to confirm a resumption of the uptrend. Friday’s bullish break confirms 1.3977 as the next key upside level, marking the Oct 13 2022 high. Moving average studies are in a bull-mode position too, highlighting an uptrend. On the downside, initial firm support is seen at 1.3681, the 20-day EMA.
SOFR/Treasury option flow remained mixed Friday, early focus on unwinding/rolling November serial Tsy options ahead today's expiration (Nov SOFR options expire in 2 weeks). Underlying futures off lows, trading mildly higher in the short end to intermediates. As such, projected rate hikes into early 2024 inch lower: November at 0% to 5.325%, December cumulative of 4.3bp at 5.372%, January 2024 cumulative 6.9bp at 5.398%, March 2024 at 2.8bp at 5.356%. Fed terminal at 5.40% in Feb'24.