USDCAD TECHS: Shallow Bounce Off Lows
- RES 4: 1.4111 High Apr 10
- RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
- RES 2: 1.3920 High May 21
- RES 1: 1.3879 High Aug 1
- PRICE: 1.3775 @ 09:00 BST Aug 14
- 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
USDCAD remains subdued, despite the shallow bounce Friday feeding through to further gains on Tuesday. The reversal off mid-week highs affirms this theme. The pair remains notably lower on the week on the back of the recent phase of USD weakness. Initial firm support has been breached at the 1.3745 20-day EMA, a clean break below which would resume the correction off the early August high at 1.3879. This week’s price action has cancelled any bullish threat and returned focus lower. The 100-dma becomes a key pivot point at 1.3808 last.
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SONIA OPTIONS: SFIZ5 96.25/96.05/95.85 Put Fly Lifted
SFIZ5 96.25/96.05/95.85 put fly paper paid 3.25 on 5.5K. Was also lifted on 5.5K yesterday.
US TSY FUTURES: FV/US Flattener Blocked
Latest block trades lodged at 08:36:12 London/03:36:12 NY:
- FVU5 7.9K lots blocked 108-03.25, looks like a seller.
- USU5 2.5K lots blocked at 112-25, looks like a buyer.
- DV01 ~$340K.
NOK: Early Underperformance Fades; Jul 2 High Important Resistance In EURNOK
Early NOK underperformance has faded a little, with yesterday’s 11.8792 high containing topside in EURNOK for now. Through July, the cross has consolidated the ~4% rise seen following Norges Bank’s surprise 25bp cut on June 19. This has allowed an overbought condition to unwind, providing a more favourable technical backdrop for those expecting NOK weakness to continue. Initial resistance is the July 2 high at 11.9156, clearance of which would expose the psychological 12.0000 handle.
- Our commodities team highlight that oil is lower on Tuesday, having begun its reversal on Monday as Trump threats towards Russian sanctions were offered a 50-day deadline – easing any fears of short-term disruption.
- Note that this week’s Norwegian macro calendar is very light, leaving cross-asset dynamics at the fore for NOK FX and rates.
