USDCAD TECHS: Southbound
- RES 4: 1.3808 High Nov 3 and a key resistance
- RES 3: 1.3707 Trendline resistance drawn from the Oct 13 high
- RES 2: 1.3571 High Nov 10
- RES 1: 1.3361/1.3467 High Nov 11 / 50-day EMA
- PRICE: 1.3301 @ 15:41 GMT Nov 16
- SUP 1: 1.3226 Low Nov 15
- SUP 2: 1.3205 61.8% retracement of the Aug 11 - Oct 13 rally
- SUP 3: 1.3139 Low Sep 14
- SUP 4: 1.3023 76.4% retracement of the Aug 11 - Oct 13 rally
USDCAD is consolidating at its recent lows. A bearish theme remains intact. Last week’s sell-off resulted in a new multi-month low and confirmed a resumption of the current bear cycle. This also marks an extension of the price sequence of lower lows and lower highs. A continuation lower would open 1.3205, a Fibonacci retracement. On the upside, key short-term resistance has been defined at 1.3571, the Nov 10 high.
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NEW ZEALAND: ASB Expect CPI To OK 50bp RBNZ Hike In Nov, Note Risks Of Higher Peak
ASB expect “consumer prices to rise by 1.5% q/q in Q3, with annual CPI inflation to ease to 6.5%. Despite the lower NZD, lower global energy prices and sharply lower shipping costs hold out the prospect of further falls in imported inflation.”
- “Our expectation is that the housing group inflation is close to peaking if it has not done so already. Still, the RBNZ has its work cut out for it. Inflation may have already peaked, but it remains much too high for the RBNZ’s comfort.”
- “Core inflation rates are expected to remain sticky at close to (or at) multidecade highs, and price rises widespread. There is also the clear risk that inflation could remain entrenched at high levels and outside the 1-3% inflation target band for longer than the RBNZ would be comfortable.”
- “With the return of inflation to the 1-3% inflation target band still not assured, the RBNZ are likely to err in favour of doing too much (rather than too little) on OCR settings. We expect a 50bp OCR hike in November and a 25bp hike in February (4.25% OCR peak).”
- “Risks are heavily skewed to a more frontloaded pace of RBNZ and higher OCR peak. OCR cuts are pencilled in from later in 2024, but high inflation will need to be conquered first.”
RBNZ: VIEW: ANZ: CPI Set To Keep RBNZ On Track For Another 50bp Hike
ANZ expect “annual CPI inflation eased to 6.6% y/y, versus 7.3% in Q2. The primary driver of lower inflation is expected to be a roughly 8% fall in the NZD retail price of petrol over the quarter. But core domestic inflation pressures are likely to remain far too strong to give the RBNZ much comfort, and should keep them on track to deliver a sixth consecutive 50bp OCR hike at the November MPS.”
USDCAD TECHS: Uptrend Remains Intact
- RES 4: 1.4040 76.4% retracement of the 2020 - 2021 bear cycle
- RES 3: 1.4016 3.382 proj of the Aug 25 - Sep 7 - 13 price swing
- RES 2: 1.4000 Psychological round number
- RES 1: 1.3977 High Oct 13 and the bull trigger
- PRICE: 1.3731 @ 20:59 BST Oct 17
- SUP 1: 1.3699 Low Oct 17
- SUP 2: 1.3632/3503 20-day EMA / Low Oct 4
- SUP 3: 1.3358 Low Sep 21
- SUP 4: 1.3374 50-day EMA
USDCAD started the week on a bearish note and reversed Friday’s gains. Despite the pullback, the uptrend remains intact. The latest recovery from 1.3503, Oct 10 high, reinforces bullish conditions and this low represents a key short-term support. Moving average studies continue to highlight an uptrend and 1.3838, the Sep 30 high and key resistance has been cleared, strengthening bullish conditions. Support to watch is 1.3632, the 20-day EMA.
