USDCAD TECHS: Trend Signals Point South

• RES 4: 1.4200 Round number resistance
• RES 3: 1.4111 High Apr 4
• RES 2: 1.3909/1.4016 50-day EMA / High May 12 and 13
• RES 1: 1.3791 20-day EMA
• PRICE: 1.3684 @ 16:07 BST Jun 9 
• SUP 1: 1.3611 Low Oct 8 2024        
• SUP 2: 1.3579 1.500 proj of the Feb 3 - 14 - Mar 4 price swing
• SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
• SUP 4: 1.3473 Low Oct 2 2024 

The trend structure in USDCAD remains bearish and the pair traded lower last Thursday, to a fresh cycle low. Support at 1.3686, the May 26 low and a bear trigger, has been cleared. This confirms a resumption of the downtrend and maintains the price sequence of lower lows and lower highs. Sights are on 1.3579 next, a Fibonacci projection. Resistance at the 50-day EMA is at 1.3909 - a key level. The 20- EMA is at 1.3791.    

• Muted reaction so far, stocks pared gains after wires reported a battalion of Marines (appr 500) to be deployed to Los Angeles. 

• BofA expect core CPI inflation at 0.24% M/M in May which lifts the Y/Y a tenth to 2.9%.
• “We expect to see more signs of tariffs driving prices higher, but favorable seasonal factors for autos and declines in certain services categories will keep a lid on the top line inflation numbers.”
• “We forecast core goods inflation of 0.2% m/m in May, an acceleration from the 0.1% m/m print in April. Tariffs should have a broader impact on the data than last month, where the clearest sign of tariff-driven price hikes was the 8.8% m/m spike in audio equipment. However, new and used vehicle prices will likely fall due in part to seasonal factors.” Core goods ex new & used cars seen at 0.3% M/M.
• They see core services at 0.3% M/M for a second consecutive month. “Like last month, discretionary services-lodging away from home and airfares- prices likely fell. Rent and OER inflation should be little changed.
• Headline CPI is seen at 0.16% M/M to push the Y/Y a tenth higher at 2.4%.
• BofA currently see core PCE at 0.21% M/M, which would see the Y/Y “rounding up to 2.7% from 2.5%, given the unfavorable base effects from last May.”