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USDCAD Consolidating Last Week’s Slide, CFTC CAD Net Shorts Trimmed Notably

  • USDCAD trades close to session highs of 1.3452, just above Friday’s post-payrolls high of 1.3451 but in relative terms largely tracking sideways since Thursday’s slide on a number of favourable factors for CAD.
  • Some of those factors remain in place (WTI holding net gains after OPEC and S&P E-minis consolidating Friday’s increase), but it’s less supportive for CAD today whilst GoCs marginally outperform Treasuries after spreads widened post-payrolls (Can-US 2YY diff back to -20bps).
  • The pair remains soft, with support seen at 1.3407/04 (Jun 2/May 16 lows) and resistance at the 20-day EMA of 1.3523. There could be some near-term traction at current levels with $994m of expiry at 1.3430 for today’s cut although it lands with ISM Services.
  • Note that latest CFTC positioning has shown a large trimming of CAD net shorts, from -30.5% to -16.6% to the lowest since mid-March. The data as of May 30 came before the stronger than expected GDP print and subsequent CAD appreciation.

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