USDCAD TECHS: Unwinding An Overbought Condition
- RES 4: 1.3977 High Oct 13 ‘22 and a key M/T resistance
- RES 3: 1.3899 High Nov 1 and a key resistance
- RES 2: 1.3855 High Nov 10 2023
- RES 1: 1.3846 High Apr 16
- PRICE: 1.3758 @ 17:11 BST Apr 18
- SUP 1: 1.3682 Low Apr 12
- SUP 2: 1.3647 20-day EMA
- SUP 3: 1.3577 50-day EMA
- SUP 4: 1.3478 Low Apr 4
Recent gains in USDCAD reinforce current bullish conditions. The pair has cleared resistance and congestion at 1.3614, the Mar 19, 22, 25 and 29 high. This opens 1.3855 next, the Nov 10 ‘23 high. Note that MA studies are in a bull-mode position, highlighting a clear rising trend. The pullback from Tuesday’s high is considered corrective and is allowing an overbought trend condition to unwind. Initial firm support lies at 1.3647, the 20-day EMA.
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EURJPY TECHS: Trips Bull Trigger
- RES 4: 165.15 2.0% 10-dma envelope
- RES 3: 165.00 Round number resistance
- RES 2: 164.30 High Nov 16 and a key medium-term resistance
- RES 1: 163.76 High Mar 19
- PRICE: 163.75 @ 16:12 GMT Mar 19
- SUP 1: 161.95 Low Mar 18
- SUP 2: 161.07/22 Trendline drawn from Dec 7 low / Low Mar 11
- SUP 3: 159.47 Low Feb 8
- SUP 4: 158.92 Low Feb 7
EURJPY traded through the bull trigger Tuesday, firming the near-term outlook. Clearance here opens 164.30, the Nov 16 high. Key trendline support - at 161.07 - drawn from the Dec 7 low remains intact. The trendline has recently been pierced. A clear break of the line is required to signal a reversal, paving the way initially for 158.92, the Feb 7 low. While the trendline holds, the outlook is bullish.
MNI: US TSY TICS NET FLOWS IN JAN -$8.8B
- MNI: US TSY TICS NET FLOWS IN JAN -$8.8B
- US TSY TICS NET L-T FLOWS IN JAN +$36.1B
US: Macro Since The Jan FOMC: Inflation - Core Goods Deflation Fizzling Out [3/3]
- More broadly, after impressive disinflation last year, the Fed is looking to see service inflation moderate in case the benefit from improved supply chain pressures limits further goods disinflation/deflation.
- The latter appears to be playing out in recent months, with the NY Fed’s supply chain pressures index moving back to neutral levels after a dropping to historical lows in 1H23 last seen in 2008 and 2001.
- This has been met by consumer core goods price deflation fizzling out and latest core PPI inflation accelerating with one measure at its highest six -month trend rate in a year.
