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USDCAD Eyes Resistance As Equity Sell-Off Gathers Pace

CANADA
  • USDCAD has pushed through overnight highs from China Covid worries, hitting a session high of 1.3486 (+0.8%) in a move tied to the souring risk environment with equities sliding and real yields climbing.
  • The nature of (partly) Fed-driven dollar strength helps see CAD switch to outperforming high beta peers after lagging this morning.
  • USDCAD has more firmly moved above the 50-day EMA of 1.3439 and eyes resistance at 1.3495 (Nov 21 high), clearance of which could put more attention on 1.3571 (Nov 10 high).
  • It goes to highlight the extent to which US rates and broader risk sentiment have a hold on the pair, having remained in a relatively tight session range beforehand despite a much larger than expected Canadian current account deficit for Q3.

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