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USDCAD Declines On Improved Risk Sentiment, Heavy Option Expiry Tomorrow

CANADA
  • USDCAD has pushed to a new session low of 1.3764, with the renewed decline coming as the S&P e-mini (+1.6%) and WTI (+2.2%) see solid gains.
  • That backdrop helps CAD see rare outperformance, second only to NZD on the day.
  • The move lower more notably pushes below support at 1.3790 (Oct 26 low) to next open 1.3739 (20-day EMA) although the technical backdrop has previously indicated an upward trend with resistance at 1.3899 (Nov 1 high).
  • Ahead, key macro events come from joint labour reports tomorrow. Those releases will also be followed by some very large FX option expiry at the NY cut, with a cumulative $3.9b through 1.3700-1.3750 as well as $1.75b at 1.3900.

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