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USDCAD More Than Reverses US PCE Rise, Extends Corrective Pullback

CANADA
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  • USDCAD has pushed to new session lows of 1.3658, nearing tentative support at yesterday’s 1.3655 after which lies 1.3602 (50-day EMA).
  • Declines are seen as corrective from a technical standpoint, with resistance at 1.3763 (Apr 22 high) before YTD highs of 1.3846 (Apr 16 high).
  • The pair has more than reversed the sharp rise to 1.3731 after strong US core PCE inflation in Q1 (which still keeps Tsy yields elevated with the 2YY currently just shy of 5%), with that reversal seen broadly against the USD with some reluctance to extend further ahead of the BoJ overnight.
  • Today has also seen some at the margin hawkish Canadian releases, with the CFIB small business survey seeing a strong increase in price and wage setting plans and the SEPH release showing an uptick in the vacancy rate along with an acceleration in wage growth metrics.
  • US PCE headlines tomorrow’s data after the surprise core PCE strength in Q1. Canada only sees advance wholesale sales for March after soft releases for retail and manufacturing sales yesterday.
  • Tomorrow’s largest expiries are a heavy $1.29bn at 1.3870 and $0.74bn at 1.3860 but they’re some way off current strikes.
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  • USDCAD has pushed to new session lows of 1.3658, nearing tentative support at yesterday’s 1.3655 after which lies 1.3602 (50-day EMA).
  • Declines are seen as corrective from a technical standpoint, with resistance at 1.3763 (Apr 22 high) before YTD highs of 1.3846 (Apr 16 high).
  • The pair has more than reversed the sharp rise to 1.3731 after strong US core PCE inflation in Q1 (which still keeps Tsy yields elevated with the 2YY currently just shy of 5%), with that reversal seen broadly against the USD with some reluctance to extend further ahead of the BoJ overnight.
  • Today has also seen some at the margin hawkish Canadian releases, with the CFIB small business survey seeing a strong increase in price and wage setting plans and the SEPH release showing an uptick in the vacancy rate along with an acceleration in wage growth metrics.
  • US PCE headlines tomorrow’s data after the surprise core PCE strength in Q1. Canada only sees advance wholesale sales for March after soft releases for retail and manufacturing sales yesterday.
  • Tomorrow’s largest expiries are a heavy $1.29bn at 1.3870 and $0.74bn at 1.3860 but they’re some way off current strikes.