USDCAD TECHS: Still Looking For Gains

Last week’s hawkish repricing in EUR STIRs, triggered by ECB Executive Board member Schnabel’s comfort with markets pricing the next ECB rate move as a hike, saw 2-Year Schatz yields threaten to break above 2.20% for the first time since March.

• Still, that level held, with cross-market inputs helping to stall the hawkish momentum through the second half of last week. 2-Year German yields last tade at 2.16% after ending November at 2.03%.
• Elsewhere, note that J.P.Morgan recommended initiating longs in the DUF6 106.80/107.00 call spread vs. DUH6 late on Friday.
• They noted interest in EUR 1y1y but preferred to engage in the above Schatz play given risks around diminished year-end liquidity in 1y1y.
• J.P.Morgan wrote “with the recent move, front-end yields have broken out of their recent ranges and 1y1y €STR is back to its YTD highs. Admittedly, strength in macro data and especially stickier inflation has somewhat removed the downside risks that we had highlighted in our 2026 Outlook scenarios and potentially warrants a re-assessment of the expected range. We move our expected range for 1y1y €STR higher by around 10bp to 1.90-2.10% over the coming months. At around 2.15%, we find 1y1y €STR to be modestly cheap”. 

• RES 4: $68.397 - 2.236 proj of the Oct 28 - Nov 13 - 21 price swing
• RES 3: $66.312 - 2.000 proj of the Oct 28 - Nov 13 - 21 price swing
• RES 2: $65.000 - Round number resistance
• RES 1: $64.657 - High Dec 12   
• PRICE: $63.364 @ 08:08 GMT Dec 15
• SUP 1: $60.107/56.928 - Low Dec 12 / 20-day EMA  
• SUP 2: $52.488/48.644 - 50-day EMA / Low Nov 21 
• SUP 3: $45.557 - Low Oct 28
• SUP 4: $41.135 - Low Sep 17 

Trend signals in Silver remain bullish and last week’s push to fresh cycle highs reinforce current conditions. The metal has traded through the psychological $60.00 handle and this paves the way for an extension towards the $66.312 handle next, a Fibonacci projection. Moving average studies are in a bull-mode position reinforcing current bullish conditions. Initial key support lies at $56.928, the 20-day EMA.

• RES 4: 1.4140 High Nov 5 and a key resistance   
• RES 3: 1.4051 High Nov 28 
• RES 2: 1.3921 20-day EMA  
• RES 1: 1.3872 High Dec 10  
• PRICE: 1.3763 @ 08:01 GMT Dec 15
• SUP 1: 1.3754 Low Dec 12
• SUP 2: 1.3727 Low Sep17
• SUP 3: 1.3682 76.4% retracement of the Jun 16 - Nov 6 bull cycle 
• SUP 4: 1.3637 Low Jul 25  

A bear theme in USDCAD remains intact, reinforced by last week’s extension lower. The move down maintains the current bearish price sequence of lower lows and lower highs and signals scope for a continuation towards 1.3727 next, the Sep 17 low. Initial firm resistance to watch is 1.3921, the 20-day EMA. Short-term gains would be considered corrective and would allow an oversold condition to unwind.