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USDCAD Extends Corrective Pullback

CANADA
  • USDCAD bounces off session lows to partly reverse the acceleration of the day’s decline after the US open, with net declines a combination of equity/WTI strength rather than a rates story.
  • It saw the pair test support at the 20-day EMA of 1.3660, briefly touching 1.3651, before retracing to 1.3684. Further firming of risk sentiment are likely required to next open key support at 1.3503 (Oct 4 low).
  • TD think dips into 1.36/37 should be strongly faded with a view to moving to 1.40 in the coming weeks, whilst CIBC Strategy look for a retracement to the 1.34-1.35 area soon before a medium-term call for USDCAD north of 1.40 as softer activity dampens the BoC terminal.

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