CAD: USD/CAD Pressured, Latest Phase of Sales May be Tied to Month-end
May-30 14:59
Despite the pressure on oil prices on the back of pre-OPEC meeting speculation, CAD has extended the recent spell of strength to be the best performing currency in G10. This price action backs up the underlying bear trend for USD/CAD - through which a sell-on-rallies theme clearly persists. Barring the corrective bounce earlier in the week, the sequence of lower lows and lower highs. Sights are on 1.3643 next, the Oct 9 2024 low.
- The strong CAD close today comes off the back of better-than-expected quarterly GDP data earlier today, and despite the proximity to next week's expected 25bps rate cut from the BoC.
- The very recent phase of USD sales into the Friday fix is also helped here - recall it's calendar month-end today (month-end value date was Wednesday) and this latest boost for the major pairs may be reflective of late May flow.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
STIR: SOFR Option Update: Call & Vol Sales
Apr-30 14:57
- -10,000 2QU5 97.25/97.31 call spds 1.5 ref 96.845
- +3,000 SFRU5 96.50/97.00 call spds 1.75 over 3QU5 96.87/97.25 call spd
- -2,500 SFRZ5 96.68 straddles, 73.0 ref 96.69
- -5,000 2QU5 97.25/97.31 call spds, 1.5 ref 96.84
GILT AUCTION PREVIEW: On offer next week
Apr-30 14:37
The DMO has announced it will be looking to sell GBP4.5bln of the 4.375% Mar-30 Gilt (ISIN: GB00BSQNRD01) at its auction next Wednesday, May 7.
FOREX: Weaker Risk Sentiment Weighing on AUD, Support Not Seen Until 0.6310
Apr-30 14:36
- Weaker sentiment across the major equity benchmarks Wednesday has moderately weighed on the likes of AUD and NZD, both registering fresh weekly lows in recent trade. As a reminder, month-end models are suggestive of greenback demand, which may provide an additional headwind as we approach today’s WMR fix.
- In particular, AUDUSD’s sharp recovery from the April lows has stalled over the past week, and today’s firmer-than-expected Australian CPI data has done little to move the needle. Notably the pair has traded either side of the 0.6400 handle for eight consecutive trading sessions, unable to build any lasting momentum above the February highs around 0.6410.
- Initial key support to monitor is 0.6310, the 50-day EMA. A clear break of this average would be a concern for the underlying bullish narrative, signalling scope for a deeper pullback towards 0.6181, the Apr 11 low.
- It is worth noting that AUDJPY has broadly respected initial resistance at the prior breakdown level around 91.85. Moving average indicators continue to indicate a bearish trend for the cross, while trendline resistance off the 2024 highs also remains firmly intact.
- Goldman Sachs recently noted that equities still look vulnerable to nearer-term downside. They highlighted that the speed of the Dollar sell-off leaves it susceptible to shorter-term swings, therefore preferring to be short AUDJPY tactically.
