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Larger Trade Deficit Stokes USDCAD Rally Before Hitting Oversold Territory

CANADA
  • A larger than expected trade deficit for June (C$3.73B vs C$2.79B cons) briefly added fuel to USDCAD’s fire even if there was a modestly offsetting upward revision to May.
  • USDCAD quickly cleared 1.35 as it continues its push towards 1.3523 (76.4% retrace of May 26 – Jul 14 downleg) in what would be the fourth resistance level of the day. It has since dipped 10 pips after the 1.35 handle tallied with a RSI 14-day metric nudging oversold territory.
  • CAD continues to outperform other high beta peers but is quickly closing in on Antipodeans at near -1% on the day after lighter activity owing to Civic Holiday.

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