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USDCAD Decline Plateaus

CANADA
  • The steady decline in USDCAD overnight appears to have plateaued with the pair -0.4% at 1.2983, leaving CAD firmly mid-pack of the majors as Can-US yield differentials offer reduced support after being trimmed notably last week.
  • Coming just before the surprise front-loaded 100bp hike from the BoC on Wed, latest CFTC net spec data for Tue showed largely steady CAD net longs, at 2.5% of OI, compared to reduced but still solid net shorts of -26% for AUD and -12% for NZD.
  • Technicals see the recent pullback as corrective, with resistance at 1.3166 (3.0% upper Bollinger band) after last week clearing key resistance at 1.3084 (Jul 5 high).

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