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USDCAD Corrective Pullback Helps Further Relieve Overbought Conditions

CANADA
  • USDCAD is seeing some modest upward pressure as the S&P 500 e-mini slips, but at 1.3750 it has on balance moved lower today as equity futures have ultimately limited overnight declines and WTI has edged out gains.
  • Declines have helped the pair move away from overbought conditions (which had been seen for the first time since August), but are nevertheless seen as corrective. Support is seen at 1.3682 (Apr 12 low) whilst resistance is seen at Tuesday’s 1.3846 after which lies 1.3855 (Nov 10, 2023 high).
  • Monday sees a reasonable $809m expiring at 1.3775 for the NY cut. Today’s heavy $1.66bn at 1.3700 helped offer some downward pressure in an otherwise light docket.
  • Monday also sees March input cost inflation in an unusually long gap since this week’s surprisingly soft CPI report pushed the Can-US yield differential even lower.

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