USDCAD TECHS: Southbound

• 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: 1.4151 Channel top drawn from Jul 23 low 
• PRICE: 1.4009 @ 16:31 GMT Nov 11
• SUP 1: 1.4001 Low Nov 10
• SUP 2: 1.3955 50-day EMA 
• SUP 3: 1.3888 Low Oct 29 and a key support  
• SUP 4: 1.3874 Bull channel base drawn from the Jul 23 low

USDCAD continues to trade below last week’s high. The latest pullback highlights a potential bearish development and a possible reversal. Resistance at the top of a bull channel, currently at 1.4151, remains intact. The bull channel is drawn from the Jul 23 low. The pair has pierced support at the 20-day EMA, at 1.4021. This exposes the 50-day EMA at 1.3955. For bulls, a break of the channel top would confirm a resumption of the uptrend.     

The AUD/USD had a range overnight of 0.6515-0.6538, Asia is trading around 0.6530. Risk consolidated its recent gains and the markets saw more breadth, the USD moved lower in response to a weaker ADP jobs report. The AUD/USD has found support and continues to consolidate above 0.6500. The AUD will be one of the main beneficiaries while this positive sentiment dominates the market. The AUD/USD needs a sustained push above the 0.6550 area for the focus to turn back toward the 0.6650/0.6700 year highs. Until then look for some range trading within 0.5490-0.5560.

• MNI AU - AUSTRALIA: Easing Cycle May Be Done. When updated for Q3 CPI, Q2 GDP and the RBA’s November projections, our simple policy reaction function based on the core inflation and output gaps is signaling no further easing. As trimmed mean inflation doesn’t return to the 2.5% band mid-point by the end of 2027 on current assumptions, there is a risk of monetary tightening.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD1.37b), 0.6530(AUD 939m). Upcoming Close Strikes : 0.6520(AUD852m Nov 13), 0.6750(AUD2.17b Nov 14) - BBG
• Data/Event: Home Loans Value, RBA’s Brad Jones holds a fireside chat at the Association of Superannuation Funds of Australia Conference

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

What federal government data will the Fed have by its Dec 9-10 meeting?

• The Fed should have the September and October Employment Report data in hand, though the latter could be truncated as noted above. The November report looks likely to come out just after the Fed meeting.
• Inflation is a different story. September CPI of course has been published, and the September PCE data should be in line to be produced by the BEA but with a lag – in 2013 it released the September data on Nov 8.
• That will probably be the last piece of major inflation data before the Fed meeting.
• As noted above, the October CPI report may not be released at all. The November data was scheduled to be released on the morning of the FOMC decision but that looks extremely unlikely now.
• Q3 advance GDP should be in hand, as should September/October retail sales as well as the latest weekly jobless claims.
• Of course there is plenty of "alternative" data with which to make a decision - in our PDF report, we go through various indicators across inflation, employment, and economic activity available to policymakers.