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USDCAD Breaks Below Unusually Narrow Ranges

CANADA
  • Renewed strength in US equity futures has helped USDCAD push below what has been an exceptionally narrow range for the past two days.
  • The 23 pips on Mon and 20 pips Tue was equal to the 21 pips on Jan 1 and last narrower Jan 1, 2021.
  • USDCAD at 1.3623 remains ~15 pips above pre-NFP/CAD jobs levels, before the pair lifted on surprisingly weak Canadian jobs growth and a large increase in the u/e rate (from 6.24% to 6.42%, with a Sahm rule calculation at 1.0 vs the 0.4 in the US).
  • The weak jobs report has seen BoC cut expectations for Jul 24 build to ~16bps.
  • US CPI will no doubt have an impact tomorrow but next week’s quarterly BoC surveys and CAD CPI remain in the spotlight, with the latter coming after a surprise – but for now only a single – month higher after a string of dovish surprises drove the first cut of the cycle in June.
  • The bear threat is still present with a key support at 1.3590 (May 16 low) whilst resistance is seen at 1.3671 (50-day EMA).

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  • Renewed strength in US equity futures has helped USDCAD push below what has been an exceptionally narrow range for the past two days.
  • The 23 pips on Mon and 20 pips Tue was equal to the 21 pips on Jan 1 and last narrower Jan 1, 2021.
  • USDCAD at 1.3623 remains ~15 pips above pre-NFP/CAD jobs levels, before the pair lifted on surprisingly weak Canadian jobs growth and a large increase in the u/e rate (from 6.24% to 6.42%, with a Sahm rule calculation at 1.0 vs the 0.4 in the US).
  • The weak jobs report has seen BoC cut expectations for Jul 24 build to ~16bps.
  • US CPI will no doubt have an impact tomorrow but next week’s quarterly BoC surveys and CAD CPI remain in the spotlight, with the latter coming after a surprise – but for now only a single – month higher after a string of dovish surprises drove the first cut of the cycle in June.
  • The bear threat is still present with a key support at 1.3590 (May 16 low) whilst resistance is seen at 1.3671 (50-day EMA).