THAILAND: Vitai Suggests Central Bank Stands Ready To East Policy If Needed

USD demand in recent trade with European equities off session highs and core global FI firming, looking for a clear driver, no new news on the major wires.

RES 4: 1.4111 High Apr 10  

• RES 3: 1.4019 38.2% retracement of the Feb 3 - Jun 16 bear leg
• RES 2: 1.3925 High Aug 22 and the bull trigger
• RES 1: 1.3868 High Aug 26
• PRICE: 1.3859 @ 08:01 BST Sep 10
• SUP 1: 1.3782/27 50-day EMA / Low Aug 27 and a bear trigger  
• SUP 2: 1.3709 61.8% retracement of the Jul 23 - Aug 22 bull cycle
• SUP 3: 1.3658 76.4% retracement of the Jul 23 - Aug 22 bull cycle 
• SUP 4: 1.3637 Low Jul 25  

A bull cycle in USDCAD remains intact. The recovery from the Aug 29 low highlights a potential early reversal signal and if correct, marks the end of the corrective pullback between Aug 22 - 29. An extension higher would open the bull trigger at 1.3925, the Aug 22 high. Support lies at 1.3727, the Aug 29 low. Clearance of this level would instead reinstate a short-term bear theme and expose 1.3709 initially, a Fibonacci retracement.

The ECB is fully expected to leave its three key rates on hold on Thursday, with its deposit rate at 2.00%. President Lagarde is expected to continue to suggest policy is in a good place. 

• A data-dependent and meeting-by-meeting approach is expected to be reiterated in a continuation of July’s “deliberatively uninformative” communication approach around future rate decisions.
• Lagarde’s characterisation of economic resilience and/or the extent to which uncertainty has been alleviated by the US-EU trade deal should help shape market reaction.
• MNI’s full ECB preview is here
• ECB-dated OIS price 17bps of easing through July 2026, little changed from yesterday’s close.
• Euribor futures are flat to +1.5 ticks through the blues, with the strip lightly bull flattening. Since the ECB's July decision, ERZ6 has traded in a tight 13 tick range.