USD: Goldman Sachs On Monitoring Downside Risks To Its USD View

• RES 4: 1.4663 2.0% 10-dma envelope
• RES 3: 1.4564 3.500 proj of the Oct 17 - Nov 1 - 6 price swing
• RES 2: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
• RES 1: 1.4516 High Jan 21  
• PRICE: 1.4327 @ 16:10 GMT Jan 24 
• SUP 1: 1.4261 Low Jan 20
• SUP 2: 1.4245 50-day EMA
• SUP 3: 1.4120 Low Dec 11 
• SUP 4: 1.4011 Low Dec 5

USDCAD has traded in a volatile manner this week. Recent price action highlights an important short-term resistance at 1.4516, the Jan 21 low and a support at 1.4261, the Jan 20 low. The trend condition remains bullish and a clear breach of 1.4516 would confirm a resumption of the bull cycle. For bears, a clear break of 1.4261 and 1.4245, the 50-day EMA, would instead highlight a possible reversal.

• Treasury futures look to finish mildly firmer Friday, well off early session lows after this morning's S&P Global US composite PMI surprisingly fell in the January flash release to its lowest since April after the 55.4 in December marked a 32-month high.
• However, firms' expectations of output over the coming year remain strong looking at policies under the second Trump administration and inflationary pressures saw a four-month high which helped limit the dovish reaction from the headline services miss.
• Meanwhile, U.Mich long-run inflation expectations were trimmed in the final January release from what had been a particularly sharp increase to the highest since 2008. 3.2% is still elevated though, having twice in the past three months exceeded what had been a typical 2.9-3.1% range since mid-2021.
• The Greenback declined during the APAC session as headlines crossed from US President Trump around not wanting to use tariffs on China,. The theme has prevailed throughout the session (later bolstered by weaker than expected US PMI), cementing USD index losses in the region of 0.7%, and extending the weekly decline to around 2%.
• After the bell, the Tsy Mar'25 10Y futures contract trades +3 at 108-15 vs. 108-07.5 low, well within technicals: resistance above at 109-04/109-06 (High Jan 21 / High Dec 31) vs. support at 108-00/107-06 (Low Jan 16 / 13 and the bear trigger). Curves well off early highs, 2s10s +0.110 at 35.143 vs. 38.045 high, 5s30 +0.270 at 41.706 vs. 44.753 high.

• RES 4: 0.6441 38.2% retracement of the Sep 30 - Jan 13 downleg  
• RES 3: 0.6429 High Dec 12               
• RES 2: 0.6384 High Dec 13  
• RES 1: 0.6331 High Jan 24
• PRICE: 0.6320 @ 16:08 GMT Jan 24 
• SUP 1: 0.6245 20-day EMA     
• SUP 3: 0.6165/31 Low Jan 17 / 13 and the bear trigger
• SUP 3: 0.6100 Round number support
• SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing

A bearish trend condition in AUDUSD remains intact and the recent recovery is considered corrective. However, the pair has traded higher today and in the process pierced resistance at 0.6327, the 50-day EMA. A clear break of the EMA would strengthen a short-term bullish condition and signal scope for a stronger recovery. This would open 0.6384, the Dec 13 high. The key support and bear trigger has been defined at 0.6131, the Jan 13 low.