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CAD Sees Further Supported Following Hawkish BoC

CANADA
  • USDCAD has seen a volatile couple of sessions but ultimately trades just +0.1% at 1.2592 in a move that unwinds yesterday's move lower but keeps near recent lows.
  • Last week's hawkish BoC double commentary continues to support CAD, with CAD leading all other majors today, including AUD despite the surprise 50bp hike from the RBA overnight.
  • Technicals paint a bearish picture for the cross, with support at yesterday’s low of 1.2535, clearance of which could ultimately open 1.2459 (Apr 21 low). Resistance is eyed at 1.2686 (Jun 2 high).
  • It continues to struggle to meaningfully dip below the 76.4% retracement of the Apr 5 -May 12 rally at 1.2562 but the fact the cross is holding as low as it is with S&P E-minis sliding is testament to current strength behind CAD.

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