USDCAD TECHS: Remains Under Pressure

• RES 4: 1.3920 High May 21  
• RES 3: 1.3862 High May 29 
• RES 2: 1.3798 High Jun 23  
• RES 1: 1.3667/3769 20- and 50-day EMA values
• PRICE: 1.3645 @ 16:05 BST Jul 7
• SUP 1: 1.3557 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

The trend needle in USDCAD continues to point south, with Monday’s reversal off intraday highs a further bearish signal. Last week’s move down reinforces current conditions. S/T gains between Jun 16 - 23 appear to have been corrective. Sights are on key support and the bear trigger at 1.3540, Jun 16 low. Clearance of this level would resume the downtrend and open 1.3503, a Fibonacci projection. Pivot resistance is at the 50-day EMA, at 1.3769. A clear break of it would signal scope for a stronger recovery.  

Reuters runs the headline "WHITE HOUSE OFFICIAL SAYS TARIFFS WON'T STACK"

• Unclear whether this refers to stacking over the original 10% baseline (for example, Vietnam's agreed 20% tariff didn't stack on top of the 10% imposed across the board while the 90 day negotiation period was ongoing), or the sectoral tariffs (as in an earlier article by Bloomberg on the SKorea/Japan tariffs, see text below) - or both.
• Either way Pres Trump is set to sign an executive order at 4pm ET that would effectively extend the 90-day deadline of Jul 9 to Aug 1 for the imposition of reciprocal tariffs.
• Bloomberg earlier: "Steel and aluminum tariffs, currently set at a 50% rate as part of the Section 232 sectoral rates, will remain in place but will not stack on top of the 25% rate. A number of other sectoral tariffs are also under investigation but have not yet taken effect."

• Treasuries look to finish broadly lower - but off midday lows as Pres Trump announced tariffs via social media Monday (that spurred Brazil's Lula to say it is "Irresponsible to threaten tariffs on Social Media).
• Currently, Tsy Sep'25 10Y futures trades -7.5 at 110-31.5 (110-29 low / 111-12.5 high), sitting on key support at 110-31, the 50-day EMA, and the Jul 3 low. A clear break of this average would signal scope for a deeper correction and highlight a possible reversal.
• Tsy 10Y yield climbed to 4.3972% high late Monday, curves bear steepened w/ 2s10s +2.512 at 47.473, 5s30s +3.771 at 96.145.
• Tsys had gapped higher briefly early Monday after Tsy Sec Bessent alluded to several trade announcements expected over the next 24 hours with "plenty of countries wanting to make deals" -- but Tsys swiftly pulled back from highs amid a general lack of specifics from the Trump administration.
• Rates extended lows along with equities after Pres Trump announced 25% tariffs on Japan and South Korea Goods. Additional announcements included: 25% tariffs on Malaysia and Kazakhstan, 30% on South Africa and 40% on Laos and Myanmar.
• Price action is bolstered by the USD index respecting its test of long-term trendline support, fostering the subsequent extension to fresh recovery highs.
• No data Monday, limited on tap Tuesday: NFIB Small Business Optimism at 0600ET, Consumer Credit at 1500ET, Tsy bills and $58B 3Y Note auction (91282CNM9) at 1300ET. Main focus on Wednesday's FOMC minutes for the June meeting.