USDCAD TECHS: Southbound
- RES 4: 1.3856/3946 High Aug 6 / 5 and bull trigger
- RES 3: 1.3791 High Aug 7
- RES 2: 1.3646 20-day EMA
- RES 1: 1.3519/3617 High August 26 / 23
- PRICE: 1.3460 @ 16:35 BST Aug 28
- SUP 1: 1.3441 Low Aug 28
- SUP 2: 1.3420 Low Mar 8
- SUP 3: 1.3358 76.4% retracement of the Dec 27 - Aug 5 bull leg
- SUP 4: 1.3288 Low Jan 5
USDCAD traded lower again in overnight Wednesday trade, marking an extension once again of the bear cycle that started Aug 5. The move down reinforces the current bearish condition. 1.3589, the Jul 11 low, has recently been cleared, strengthening a bearish theme. This sets the scene for an extension towards 1.3358, a Fibonacci projection. On the upside, initial firm resistance to watch is at 1.3617, last Friday’s intraday high.
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USDCAD TECHS: Pierces Key Resistance
- RES 4: 1.3977 High Oct 13, 2022
- RES 3: 1.3904 1.0% 10-dma envelope
- RES 2: 1.3899 High Nov 1 and a key resistance
- RES 1: 1.3865 High Jul 29
- PRICE: 1.3857 @ 16:16 BST Jul 29
- SUP 1: 1.3778 Low Jul 24
- SUP 2: 1.3727 20-day EMA
- SUP 3: 1.3696 50-day EMA
- SUP 4: 1.3367 Low Jul 17
The recent impulsive rally in USDCAD has resulted in a break of 1.3792, the Jun 11 high, and a print above key resistance at 1.3846, the Apr 16 high. Conditions are overbought, however, a clear break of 1.3846 would strengthen the bull theme and pave the way for a continuation higher, towards 1.3899, the Nov 1 high ‘23 and a key resistance. Firm support lies at 1.3696, the 50-day EMA.
US TSYS: Tsys Firmer, Inside Session Range After Tsy Lowers Borrow Estimates
- Treasuries are modestly higher after the bell, holding to a narrow session range, brief bounce after the Tsy borrow estimate decline from $847B to $740B announced.
- There were no major surprises in Treasury's Marketable Borrowing Estimates (link), as the Treasury Department appears to take a middle-of-the-road approach on cash building ahead of the reinstatement of the debt ceiling at the start of 2025.
- The TSY quarterly refunding annc is scheduled for Wednesday at 0830ET, along with ADP, PMI and the next FOMC policy annc. Friday sees the July nonfarm payrolls data.
- Tsy Sep'24 10Y futures trade +5.5 at 111-12 vs. 111-16.5 high -- initial technical resistance followed by 111-17.5 (1.382 of Apr 25-May 16-29 swing). Curves continue to scale back from last week's steepening, 2s10s -2.129 at -21.274.
- Projected rate cut pricing into year end look steady to mildly mixed vs. late Friday levels (*) -- Nov and Dec a touch: July'24 at -4% w/ cumulative at -1bp at 5.319%, Sep'24 cumulative -28.2bp (-28.4bp), Nov'24 cumulative -43.9bp (-45.1bp), Dec'24 -67bp (-67.9bp).
AUDUSD TECHS: Impulsive Wave Likely To Extend
- RES 4: 0.6702 High Jul 22
- RES 3: 0.6653 50-day EMA
- RES 2: 0.6620 Low Jun 28
- RES 1: 0.6583 High Jul 25
- PRICE: 0.6533 @ 16:15 BST Jul 29
- SUP 1: 0.6515 Low Jul 25
- SUP 2: 0.6466 76.4% retracement of the Apr 19 - Jul 11 bull phase
- SUP 3: 0.6441 Low Apr 23
- SUP 4: 0.6407 Low Apr 22
A sharp sell-off in AUDUSD last week reinforces a bearish theme and signals scope for a continuation. The move down has resulted in a break of support at 0.6576, the Jun 10 low. A resumption of the bear leg would pave the way for a move towards 0.6466, a Fibonacci retracement point. From a near-term perspective, the pair is oversold. A recovery would allow this condition to unwind. Key short-term resistance is seen at 0.6653, the 50-day EMA.
