CANADA DATA: Record Q2 Current Account Deficit Of CAD21.1B, Tariffs Hit Exports

• RES 4: 1.4016 High May 12 / 13  
• RES 3: 1.3920 High May 21  
• RES 2: 1.3862 High May 29 
• RES 1: 1.3798 High Jun 23 and a key near-term resistance
• PRICE: 1.3778 @ 14:03 BST Jul 29
• SUP 1: 1.3679/3557 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 correction in USDCAD remains in play. However, note that price has traded through the 50-day EMA at 1.3728. A clear breach of this average would highlight a stronger short-term reversal, exposing 1.3798, the Jun 23 high. Clearance of 1.3798 would strengthen a bullish condition. On the downside, 1.3540, the Jun 16 low, marks key support. A break of this level would resume the downtrend.

The International Monetary Fund on Tuesday boosted U.S. and China growth forecasts, citing a de-escalation of tariffs and increased fiscal stimulus while warning global growth is at risk because of trade disputes. 

• America's growth estimate moved up a tenth to 1.9% this year and 0.3pp next year to 2% in the July World Economic Outlook update from the last projection in April. Donald Trump's recent fiscal package will raise annual growth 0.5pp on average through 2030, though the report warned investors may react badly to an unsustainable fiscal path.
• The agreement temporarily lowering US tariffs on China and fiscal stimulus boosts growth in the world's second-largest economy this year by 0.8pp to 4.8%. Growth in 2026 in the IMF projection is also revised up 0.2pp to 4.2%, reflecting lower effective tariffs.
• Global prospects have improved slightly in recent months in spite of the U.S.-led trade war and the IMF said risks remain tilted to the downside. "The global economy has continued to hold steady, but the composition of activity points to distortions from tariffs, rather than underlying robustness," the IMF report said. 

• MNI:US MAY FHFA HPI SA -0.2% V -0.3% APR; +2.8% Y/Y