USDCAD TECHS: Bear Cycle Remains Intact

A NBC News survey has found that, “voters are open, narrowly, to an effort to tackle inefficiencies in government. But they are concerned about billionaire Elon Musk and how his Department of Government Efficiency is executing those cuts”.

• The survey comes as Americans are increasingly sceptical of Trump's handling of the economy. The Hill notes, "the polls signal frustration over steep losses in the stock market and a potential trade war with some of America’s closest allies."
• More positively for Trump, NBC reports: “More registered voters say the U.S. is heading in the right direction (44%) than at any point since early 2004, though a majority (54%) still say the country is on the wrong track.”

Figure 1: "What best Describes what you Think About Elon Musk, DOGE, and their Efforts to Reduce Spending and the Size of the Federal Government

Source: NBC News 

• RES 4: 154.80 High Dec 12 ‘24 and a key resistance     
• RES 3: 151.45 50-day EMA 
• RES 2: 150.18/151.30 High Mar 5 / 3 and a key near-term resistance  
• RES 1: 149.46 20-day EMA  
• PRICE: 148.55 @ 16:27 GMT Mar 17 
• SUP 1: 146.54 Low Mar 11 and the bear trigger   
• SUP 2: 145.43 2.0% 10-dma envelope
• SUP 3: 145.00 Round number support 
• SUP 4: 144.13 76.4% retracement of the 16 ‘24 - Jan 10 bull leg 

The trend direction in USDJPY remains down and the latest recovery appears corrective. A fresh cycle low on Mar 11 strengthens a bearish theme. The move down resulted in a print below 146.95, 61.8% of the Sep 16 ‘24 - Jan 10 bull leg. This opens 145.92 next, the Oct 4 2024 low. Moving average studies remain in a bear-mode set-up, highlighting a dominant downtrend. Key short-term resistance is unchanged at 151.30, Mar 3 high.

• Treasury futures looked to finish Monday's session mixed, well off midday highs, curves flatter (2s10s -4.117 at 25.178) with 2s through 10s trading progressively weaker after a rocky start. Treasuries extended early morning highs then lows after this morning's lower than expected Retail Sales and down-revision to prior - while ex-auto/gas and the Control Group comes out steady to higher than expected; sharp decline in Empire Manufacturing.
• Headline advance retail sales were much weaker than expected in February at 0.2% M/M (0.6% expected, -1.2% prior rev from -0.9%), but this was offset by strong performances in core categories. But the control group sales rose 1.0% vs the 0.4% expected, more than offsetting the downward revision to Jan (-1.0% vs -0.8% prelim).
• Headline manufacturing index slipped -20 (cons -2) in March from +5.7. It’s the lowest since Jan 2024 having been at its strongest reading since a particularly strong 20.2 in Nov and before that Apr 2023.
• Rates hit session highs after headlines aired where Pres Trump warned retaliation against Iran for any Houthi attacks.
• The Mar'25 10Y currently trades 110-18.5 (-2) vs. 110-14 low/110-30 high - still inside initial technical levels: resistance above at 111-25 (Mar 11 high), support below at 110-12.5/110-00 (Low Mar 6 & 13 / High Feb 7). Tsy 10Y yield 4.3043% last.
• Cross asset update: Bbg US$ index off lows (BBDXY -3.44 at 1262.27), Gold attempting to rise above 3,000 again (+15.15 at 2999.31), West Texas Crude mildly higher +0.39 at 67.57.
• Focus remains on Wednesday's FPMC policy annc