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USDCAD Sees An About Turn On Powell

  • USDCAD touches session lows of 1.336 with Powell’s presser having more than unwound the spike to a session high of 1.3446 on the initial FOMC announcement and SEP publication.
  • The prior breakout after US CPI strength, which continued through yesterday’s Canadian CPI miss, sees an upward trend for the pair.
  • That technically opens 1.3462 (1.618 proj of Aug 25–Sep 7–Sep 13 price swing) after a quick clearance of 1.3421 (Sep 30, 2020 high), although the fleeting nature of the latter could still see some resistance at these levels after such a strong run up to today's meeting.
  • The day's move is broad USD based but Can-US 2Y yield differentials offer little to resistance to the recent trend in the pair, still sitting near recent lows at -24bps (barring the spike even lower on the initial FOMC statement).

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