June 29, 2022 18:37 GMT
- 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.