USDCAD TECHS: Trend Remains Bearish And Gains Appear Corrective

• RES 4: 1.4415 High Apr 1
• RES 3: 1.4296 High Apr 7 
• RES 2: 1.4131 50-day EMA 
• RES 1: 1.3906/3987 High Apr 17 / 20-day EMA  
• PRICE: 1.3862 @ 16:53 BST Apr 28
• SUP 1: 1.3781 Low Apr 21 and the bear trigger 
• SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
• SUP 3: 1.3696 Low Oct 10 2024
• SUP 4: 1.3643 Low Oct 9 ‘24 

The trend condition in USDCAD is unchanged, it remains bearish. A fresh cycle low last Monday highlights a resumption of the downtrend and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear mode position, highlighting a dominant downtrend. First resistance to watch is 1.3987, the 20-day EMA.  

We sense there may be a sense of disappointment in today's borrowing estimates given Treasury did not lower the quarter-end TGA cash targets, which had been expected by some.

• But the current quarter's borrowing requirements are - excluding the effect of TGA cash rebuild - actually $53B lower than estimated at the last refunding in February (doing the math: the borrowing requirement was revised up by $391B, but the cash increase was also revised up by $444B from zero, so if they didn't have to rebuild the TGA cash pile, the borrowing estimate would have been $53B lower).
• And Jan-March borrowing was $2B lower than had been expected back in February, again when excluding the impact of TGA cash building. And Treasury's press release takes note of both improvements.
• Taking those into account, some of the higher-end analyst estimates for borrowing in this quarter have proved too high, and at least Treasury has confirmed that it sees a slightly stronger fiscal situation in the current quarter - in line with what looks like a strong April tax take.
• That may tilt the balance on Wednesday to "no change" in the guidance that Treasury will keep nominal coupon auction sizes unchanged for “at least the next several quarters”, which would be a positive development for Treasuries.
• This shouldn't greatly change the narrative, but swap spreads have ticked slightly wider in Treasuries' favor in the aftermath of the release, potentially reflecting a bit of optimism heading into Wednesday's refunding announcement.

• RES 4: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg  
• RES 3: 0.6528 High Nov 29 ‘24
• RES 2: 0.6471 High Dec 9 ‘24
• RES 1: 0.6439 High Apr 22
• PRICE: 0.6409 @ 16:52 BST Apr 28 
• SUP 1: 0.6344/6302 Low Apr 24 / 50-day EMA  
• SUP 2: 0.6181 Low Apr 11  
• SUP 3: 0.6116 Low Apr 10 
• SUP 4: 0.5915 Low Apr 9 and key support  

AUDUSD is unchanged and remains in consolidation mode for now. A bullish theme remains intact. The pair has recently breached a key resistance at 0.6409, the Dec 9 ‘24 high. This breach reinforces bullish conditions and signals scope for a continuation higher near-term. Sights are on 0.6471 next, the Dec 9 2024 high. Initial key support to monitor is 0.6302, the 50-day EMA. A clear break of this EMA would be a concern for bulls.