FED: Tillis "Impressed" By Warsh But Maintains Committee Block On Nomination

• Amid the dollar dynamics noted above, USDCAD downside momentum has been steadily building across US hours, with the sharp turn higher for crude prices providing an additional tailwind for the Canadian dollar. Oil moves have stemmed from the latest advisory from the US Maritime Administration that US ships should stay as far away as possible from Iranian waters.
• Today’s USDCAD price action has built on weakness seen last Friday, following the mixed Canadian labour market report, but the standout part of the data showing the unemployment rate dropping unexpectedly to 6.46%, the joint-lowest since July 2024.
• Market focus is on whether the recovery from the Jan 30 low has now concluded and the broader downside theme can resume. The trend had been oversold, and the recent bounce has allowed this condition to fully unwind - making for a more attractive entry point for shorts.
• Key support and the bear trigger lie at 1.3482, the Jan 30 low. Below here, daily lows from 2024 at 1.3420 remain a notable medium-term target for the pair.
• There are no tier-one data releases from Canada this week, leaving the pair at the mercy of the US figures, however, Canada January CPI is due next Tuesday.

40,000 2QM6 (Green Jun midcurve covering SFRM8 contract - but expires same time as front June SFRM6 contract) 96.31/96.43/96.62 broken put trees, 2.0 net ref 96.625 at 1156:39ET

• RES 4: 112-31   High Dec 18 and key short-term resistance
• RES 3: 113-04   76.4% retracement of the Nov 25 - Jan 20 bear leg  
• RES 2: 112-22   High Jan 7
• RES 1: 112-16+ High Feb 6
• PRICE:‌‌ 112-03+  @ 16:59 GMT Feb 09
• SUP 1: 111-29/09 20-day EMA / Low Jan 20 and the bear trigger
• SUP 2: 111-00   Round number support
• SUP 3: 110-30+ 1.618 proj of the Oct 17 - Nov 5 - 25 price swing  
• SUP 4: 110-22+ 1.764 proj of the Oct 17 - Nov 5 - 25 price swing

A sharp rally in Treasuries Thursday resulted in a breach of the 20- and 50-day EMAs. Nonetheless, the fade off highs cements the bearish M/T condition - which suggests that the latest recovery is likely a correction. However, an extension higher would undermine the bear theme and open 112.-22, the Jan 7 high. For bears, a reversal lower would refocus attention on 111-09, the Jan 20 low and bear trigger.