USDCAD TECHS: Resistance At The Channel Top Intact For Now
- RES 4: 1.4274 High Apr 9
- RES 3: 1.4200 Round number resistance
- RES 2: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
- RES 1: 1.4139/40 Channel top drawn from Jul 23 low / High Nov 5
- PRICE: 1.4101 @ 08:10 GMT Nov 6
- SUP 1: 1.3998 20-day EMA
- SUP 2: 1.3935 50-day EMA
- SUP 3: 1.3888 Low Oct 29 and a key support
- SUP 4: 1.3859 Bull channel base drawn from the Jul 23 low
A bull cycle in USDCAD remains intact. This week’s extension highlights a clear reversal of the corrective bear leg between Oct 14 - 29. The pair has breached 1.4080, the Oct 16 high to confirm a resumption of the uptrend. Sights are on 1.4139 (pierced), the top of a bull channel drawn from the Jul 23 low. It remains intact, however, a clear break of it would open 1.4167, a Fibonacci retracement. First support lies at 1.4008, the 20-day EMA.
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Historical bullets
GERMAN AUCTION PREVIEW: 2.20% Oct-30 Bobl
This morning, Germany will hold a Bobl auction. On offer will be E4.5bln of the 2.20% Oct-30 Bobl.
- The size is in line with the last re-open of this issue on September 16.
- Recent auctions in the German Bobl segment haven't seen particularly strong demand metrics but the segment arguably has fared better than others on the German curve when looking at bid-to-cover and bid-to-offer ratios. In 2025, Bobl auction bid-to-covers came in between 1.23x to 2.52x, and bid-to-offers between 0.95x to 1.91x, respective 1.93x / 1.47x ratios reached in the September 16 auction were towards the higher end of these ranges. Low prices have been above the secondary market mid-prices throughout 2025.
- The next German auction will be next tomorrow's 15-year auction with E1bln of the 2.60% May-41 Bund (ISIN: DE000BU2F009) and E1bln of the 3.25% Jul-42 Bund (ISIN: DE0001135432) on offer.
- The 2.20% Oct-30 Bobl will be reopened next on October 28.
- Timing: Results will be available shortly after the bidding window closes at 10:30BST / 11:30CET.
GILTS: Bear Steepening
Gilts sell off on the global cues detailed in recent bullets covering weakness in wider core global FI markets before stabilising off lows.
- Futures respect yesterday’s low ta 90.41, last -20 at 90.45.
- Bears remain in technical control, with initial support and resistance still located at 90.26 & 91.28.
- Yields 0.5-2.0bp higher, curve steeper.
- 10s last ~4.75%, still operating within the multi-week 4.60-4.80% closing range.
- Light hawkish moves in GBP STIRs given moves further out the curve, SONIA futures flat to 2.0 lower, BoE-dated OIS pricing just under 5bp of easing through year-end.
- The DMO will sell GBP1.25bln of the 0.125% Jan-28 gilt via PGT this morning.
- Little else of note on the UK calendar.
- Fiscal matters continue to dominate domestic news flow.
- Former BoE MPC member Saunders told BBG that inflation will provide the government with a net GBP5bln of additional revenue, although that is hardly positive news for households.
EQUITY OPTIONS: BNP Rolling Put
BNP (17th Oct) 80p vs (21st Nov) 76p, bought the Oct for 1.55 in 1.25k.
