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Loonie Holding In Well Amidst Risk-Off

CANADA
  • USDCAD trades just +0.15% at 1.2863 as the loonie is top performer of high beta majors amidst broad Taiwan-induced risk-off.
  • It comes as Can-US yield differentials sit near where they were late last week, with the 2Y at +7bps and 10Y at -6bps after turning negative last week for the first time since early May.
  • Having touched a session high of 1.2878, resistance is eyed at the 20-day EMA of 1.2888, clearance of which could open 1.2947 (Jul 25 high), whilst support remains 1.2767 (Aug 1 low).
  • Such an unwinding of recent bearish conditions for the cross would likely require a pulling back of CAD longs, which in latest CFTC net specs positioning increased to net longs at 11% of OI last week.

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