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USDCAD Sees Quick Move Lower Around US Equity Open

CANADA
  • USDCAD sees a quick dip after pushing a session high of 1.329, moving 25 pips lower in a matter of minutes around the US open.
  • The 0.1% decline on the day is more consistent with crude oil and equities seeing mild upward pressure.
  • The pair’s brief high remained below yesterday’s 1.3304, with CAD mid-pack of G10 FX on a light docket ahead of tomorrow’s US CPI/BoC decision double.
  • Technicals suggest a bearish engulfing candle is still in play, which offers scope for a continuation towards a key support at 1.3203 (Jul 4 low), although strong CPI/a dovish BoC could see a push closer to resistance at 1.3386 (50% of May-Jun downleg)/1.3387 (Jul 7 high).
  • Unsurprisingly with tomorrow’s NY cut landing at the time of the BoC decision, option expiry is limited but includes $240m at 1.3350 and $169m at 1.3375.

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