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Skittish USDCAD With Important Data Tomorrow

CANADA
  • USDCAD has seen a volatile session to ultimately sit +0.1% at 1.2888, moving higher with Powell's participation on the ECB panel, with CAD again outperforming high beta majors.
  • Widening front-end Can-US yield differentials have helped keep some downward pressure on USDCAD today but a REER almost completely in line with its historical average and recently trimmed net spec positions gives the pair room to run in either direction.
  • Technicals have pointed to a short-term bullish reversal and initial resistance is close at 1.2917 (Jun 27 high), clearance of which could open a bull trigger at 1.3017 (Jun 23 high). As noted earlier, CIBC look for a sustained push above 1.30.
  • Going against that in the very short-term is sizeable option expiry for tomorrow’s cut-off with 1.525B at 1.2750 although that could be too far away to offer much traction.
  • Both Canadian GDP and US personal/incomes and core PCE inflation will be important drivers in the near-term.
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  • USDCAD has seen a volatile session to ultimately sit +0.1% at 1.2888, moving higher with Powell's participation on the ECB panel, with CAD again outperforming high beta majors.
  • Widening front-end Can-US yield differentials have helped keep some downward pressure on USDCAD today but a REER almost completely in line with its historical average and recently trimmed net spec positions gives the pair room to run in either direction.
  • Technicals have pointed to a short-term bullish reversal and initial resistance is close at 1.2917 (Jun 27 high), clearance of which could open a bull trigger at 1.3017 (Jun 23 high). As noted earlier, CIBC look for a sustained push above 1.30.
  • Going against that in the very short-term is sizeable option expiry for tomorrow’s cut-off with 1.525B at 1.2750 although that could be too far away to offer much traction.
  • Both Canadian GDP and US personal/incomes and core PCE inflation will be important drivers in the near-term.