USDCAD TECHS: Pressuring Resistance

• RES 4: 1.4452/4543 High Mar 13 / 4 and a bull trigger
• RES 3: 1.4415 High Apr 1 
• RES 2: 1.4302 50-day EMA 
• RES 1: 1.4248 High Apr 8
• PRICE: 1.4212 @ 16:33 BST Apr 8
• SUP 1: 1.4028 Low Apr 3 and the bear trigger 
• SUP 2: 1.3986 Low Dec 2 ‘24  
• SUP 3: 1.3944 61.8% retracement of Sep 25 ‘24 - Feb 3 bull run
• SUP 4: 1.3894 Low Nov 11 ‘24 

USDCAD has recovered from last week’s low. For now, the move higher appears corrective. The sell-off last week confirmed a resumption of the medium-term bear cycle that started Feb 3. Price has traded through a key support at 1.4151, the Feb 14 low, and this signals scope for an extension towards 1.3944, a Fibonacci retracement. On the upside, key short-term resistance is seen at 1.4302, the 50-day EMA. 

• Within the details of Thursday's CPI report for March, expect core goods inflation to continue to grow in focus as realized tariffs take effect.
• March would have seen some further adjustment to the imposition of 10% tariffs on China a full month prior in early February which was subsequently raised to 20% in early March - see the timeline in the table below, skewed to tariff announcements that might have impacted March CPI.  
• Canadian and Mexican tariffs in early March were watered down to include exemptions where USMCA compliant whilst broader tariffs on fully assembled autos were announced late in the month and with a start date only in April (heavily limiting the latter’s impact in this March report).
• As such, we’ll watch areas where China comprises the largest share of US imports, such as apparel, recreation, and some communication categories.

MNI (LONDON)

• Treasuries look to finish mostly weaker late Tuesday - off lows as tariff headlines continued to rattle markets, curves twisting to the steepest levels in over three years (2s10s tap 55.157 high) while stocks failed to hold onto midmorning gains (SPX emins slipped below 5,000 to 4,988.0 low after marking a session high of 5305.25 at midmorning).
• Treasury futures climbing off lows after Trump officials confirmed 104% added tariff on China went into effect at noon, WH press sec Leavitt adds additional tariff to be collected starting tomorrow.
• Heavy short end buying partially swap-tied as spreads narrowed sharply, projected rate cut pricing rebounded vs. morning's levels - back to pricing in a full point by year end. Current levels vs. early morning (*) as follows: May'25 at -14bp (-8.2bp), Jun'25 at -38.2bp (-28.3bp), Jul'25 at -61.6bp (-49.1bp), Sep'25 -79.3bp (-65.7bp).
• Initial equity optimism boosting the higher beta currencies in G10, before a sharp souring of sentiment prompted a significant turnaround for the likes of AUD & NZD. Overall, the dollar index remains close to unchanged, with a lot of the focus remaining on the JPY and CHF crosses, given they remain a strong barometer for global risk sentiment.
• Focus turns to March FOMC minute release at 1400ET tomorrow, CPI Thursday. PPI Friday morning. Reminder, banks kick off the latest earnings cycle this Friday with Bank of New York Mellon, Wells Fargo & Co, JPMorgan Chase and Morgan Stanley reporting.