USDCAD TECHS: Fresh Cycle High

• RES 4: 1.4195 2.0% 10-dma envelope  
• RES 3: 1.4034 1.00 proj of the Oct 17 - Nov 1 - 6 price swing 
• RES 2: 1.4000 Round number resistance  
• RES 1: 1.3999 High Nov 13
• PRICE: 1.3977 @ 16:46 GMT Nov 13
• SUP 1: 1.3851/22 20-day EMA and a key S/T support / Low Nov 6 
• SUP 2: 1.3757 50-day EMA 
• SUP 3: 1.3611 Low Oct 8 
• SUP 4: 1.3567 Low Oct 7

USDCAD traded higher again Wednesday as the pair extends the recovery from the Nov 6 low. The pair has topped the most recent trend peak of 1.3959, the Nov 1 / 6 high. This confirms a resumption of the uptrend and has also resulted in a print above 1.3977, the Oct 13 2022 high and a key medium-term resistance. Sights are on the 1.4000 handle. Initial firm support to watch lies at 1.3860, the 20-day EMA. 

With a $257.5B budget deficit in October (up from $66.6B a year earlier), the new 2025 federal fiscal year (Oct-Sep) has gotten off to a weaker start than expected (a shortfall of $232.5B median / $212.2B average had been expected). 

• The 12-month rolling balance is -$2.024T, putting it in the high 6% of GDP area (FY 2024 was 6.4% for the year), with 12M cumulative expenditure at $6.87T vs revenue of $4.84T.
• While the overall nominal 12M expenditure figure is still below Covid highs, the net interest bill continues to soar: the $886B spent on debt service over the past 12 months is a new all-time high. As a percentage of GDP, it's estimated at around 3% per MNI calculations - another fresh post-1990s high, and double the post-GFC norm.
• The incoming Trump administration aims to cut the fiscal deficit via various measures, including finding efficiencies and closing government departments - even so, with net interest payments mounting (the CBO in June saw such payments rising above 3.5% of GDP by the end of the decade), and mandatory outlays set to rise (CBO: 13.9% of GDP to 14.6% by 2030), the challenges are formidable.
• And even the CBO's projections assumed 10Y Treasury yields would fall from a peak of 4.5% in FY2024, to 3.6% toward the end of the decade.

• RES 4: 0.6762 High Oct 9   
• RES 3: 0.6727 50.0% retracement of the Sep 30 - Nov 6 bear leg           
• RES 2: 0.6671/88 50-day EMA / High Nov 7 
• RES 1: 0.6622 20-day EMA
• PRICE: 0.6485 @ 16:43 GMT Nov 13
• SUP 1: 0.6480 Low Nov 13 and the bear trigger 
• SUP 2: 0.6508 Low Aug 8
• SUP 3: 0.6490 76.4% retracement of the Aug 5 - Sep 30 bull leg
• SUP 4: 0.6472 Low Aug 6

A bear cycle in AUDUSD remains intact and recent gains appear to have been a correction. The latest sell-off signals the end of the Nov 6 - 7 corrective bounce and attention is on key support and the bear trigger at 0.6513, the Nov 6 low. A breach of this support would confirm a resumption of the downtrend and open 0.6490, a Fibonacci retracement point. Firm resistance is at 0.6671, the 50-day EMA (pierced).