Canadian Dollar: Strength against US Dollar tests key levels – Societe Generale

Societe Generale’s Kenneth Broux notes that USD/CAD has reversed from overbought territory near 1.43 and broken below a recent consolidation floor at 1.4200. The bank highlights nearby support at 1.4075 and the 50-day moving average around 1.4000, while seeing 1.4300 as a key resistance on rebounds. The move contrasts with still-supportive 2-year spreads.

Key supports and resistance in focus

"For Canada CPI today, core inflation is forecast to have stayed unchanged at 1.9% in September."

"USD/CAD rolled over and exited overbought levels at 1.43 last week but the profit taking is out of kilter with 2y spreads."

"The pair has now breached the lower limit of this range (1.4200), resulting in a deeper pullback."

"The next potential supports are located at the projection level of 1.4075 and the 50-DMA near 1.4000."

"If a short-term rebound develops, the recent pivot high at 1.4300 could act as an important hurdle."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)