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Improved Risk Sentiment Pushes USDCAD Back To Pre-CPI Levels

CANADA
  • USDCAD is back near where it was before CAD CPI/US retail sales landed, a little below 1.32 having hit resistance at 1.3243 (20-day EMA) before dropping back mostly ever since.
  • Equities and oil firming since the open have a lot to do with the push lower again, as front GoCs maintain the sizeable swing to outperforming Tsys since the CPI data were digested with 2YY now -7.6bps on the day vs -4.0bps for Tsys.
  • The above resistance remains intact whilst support is someway lower at 1.3084 (1.618 proj of Apr 28–May 8–May 26 price swing).

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