USDCAD TECHS: Southbound

• RES 4: 7080.92 0.764 proj Nov 21 - Dec 11 - 18 price swing  
• RES 3: 7021.79 0.618 proj Nov 21 - Dec 11 - 18 price swing
• RES 2: 7014.00 High Oct 30 and the bull trigger
• RES 1: 6994.00 High Dec 26   
• PRICE: 6947.25 @ 07:57 GMT Dec 30
• SUP 1: 6905.84/6855.68 20- and 50-day EMA values
• SUP 2: 6771.50 Low Dec 18 and a key support 
• SUP 3: 6684.50 Low Nov 24  
• SUP 4: 6583.00 Low Nov 21 and a reversal trigger  

The recent pullback in S&P E-Minis has been a correction. A key short-term support has been defined at 6771.50, the Dec 18 low. A break of this level is required to signal scope for a deeper retracement and would highlight a possible short-term reversal. For bulls, sights are on key resistance at 7014.00, the Oct 30 high. Clearance of this hurdle would confirm a resumption of the primary uptrend.

Early London flow of note in the TYH6 112/111 put spread vs. 114 calls, with paper paying -3 for the put spread on 5K.

• Spain December headline HICP came in in line with expectations, at 3.0% Y/Y, down from 3.2% in November. Core HICP (excluding energy and unprocessed foods) picked up, to 2.8% Y/Y (2.6% November).
• Headline CPI was 2.9% Y/Y, down from 3.0% in November with consensus for a 2.8% reading. The sequential increase of 0.3% M/M was in line with consensus, suggesting only rounding pulled Y/Y headline CPI above consensus. Core CPI remained at 2.6% Y/Y while consensus was expecting a 0.1pp deceleration to 2.5%.
• INE notes that “This trend is primarily due to the drop in fuel and lubricant prices for personal vehicles, compared to the increase in December 2024. It is also, though to a lesser extent, influenced by the rising prices of leisure and cultural activities, which are increasing, but less so than in the same month of the previous year. Meanwhile, food and non-alcoholic beverages are also contributing to the upward trend, with prices rising more than in December of last year.” Ahead of the release, analysts flagged leisure prices to increase sequentially but clean conclusions against their expectations on underlying drivers are tough to draw at this stage.
• Spain accounts for 12% of the Eurozone HICP basket.