SIA Weekly: What's Up With USD/CAD and Long Bond Yields?

This week for the SIA Equity Leaders Weekly, we are going to look back in at both the US Dollar/Canadian Dollar relationship and also the 30-Year Interest Rate, to see if there have been any recent changes.

United States Dollar/Canadian Dollar (USDCAD)

Since we last looked at the USDCAD back in October, the relationship has continued its strength in favor of the USD, moving up another "X" on the chart. With this continued strength, the USDCAD is moving closer to the next potential resistance level at $1.1752.

This strength has also continued to place pressure on Commodities and as a result on the Canadian markets as well. We need to keep a watchful eye out as this relationship may alter what positions we may be holding or wanting to purchase.

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CBOE 30-Year Interest Rate (TYX.I)

Since we last looked at this chart back in September, the bounce off the upward sloping trendline has reversed itself and it is now moving back down towards its next support level at 2.75%. Beyond that, the next support is down at 2.442% giving it plenty of potential room to drop. Since we last looked at TYX.I, the SMAX has now fallen to 2, showing short-term weakness across all asset classes except Commodities.

Both of these charts are important to look in at from time to time, as they can continue to help us in our decision making processes for clients.

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