USDCAD TECHS: Trend Signals Remain Bearish

• RES 4: 1.4200 Round number resistance
• RES 3: 1.4111 High Apr 4
• RES 2: 1.3861/1.4016 50-day EMA / High May 12 and 13
• RES 1: 1.3732 20-day EMA
• PRICE: 1.3580 @ 08:01 BST Jun 16
• SUP 1: 1.3566 Low Jun 13
• SUP 2: 1.3535 1.0% 10-dma envelope
• 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 needle in USDCAD continues to point south and fresh cycle lows last week reinforce a bearish theme. Support at 1.3686, the May 26 low and a bear trigger, has been cleared, confirming a resumption of the downtrend. This maintains the price sequence of lower lows and lower highs. Sights are on 1.3535 next, envelope-based support. Key resistance is at the 50-day EMA, at 1.3861. The 20-day EMA is at 1.3732.

"The Federal Government Expert Group on Business Cycles has revised down its forecast for Swiss economic growth. GDP adjusted for sporting events is expected to grow by 1.3% in 2025, followed by 1.2% in 2026 (March forecasts: 1.4% and 1.6% respectively). This would mean the Swiss economy growing at a significantly below-average rate in both years. The forecast assumes no further escalation of the international trade conflict."

• Despite the downward revision, the forecasts would represent reasonable growth momentum for the Swiss economy, and would thus not warrant an outsized 50bp SNB cut into negative territory at Thursday's meeting. However, the SNB's current main concern appears to lie on inflation; in May, CPI printed -0.1% Y/Y, leaving the SNB's target range to the downside for the first time in four years.
• The SNB's latest GDP forecast meanwhile sits at 1.0-1.5% for 2025 and 1.5% for 2026. Chairman Schlegel has recently mentioned that Swiss growth this year will likely be a bit weaker than estimated "a couple of weeks ago" - it was not entirely clear if he was referring to that official SNB forecast with the statement, or was previously assuming some upside risks to that following a strong 0.7% Q/Q Q1.

Gilt calls, a little wider, after Bund drops 20 ticks on the Bid in Equities.

• Range for Gilt, 92.38/92.55.