USD/CAD: Clear break below key support at 1.3331/15 to see downtrend resume – Credit Suisse

USD/CAD has removed crucial support at 1.3331/15. Economists at Credit Suisse stay biased lower and look for a clear break of the “neckline” to the September 2019 base at 1.3269 to confirm a more significant move lower, with support then seen next at 1.3206/02.

Key quotes

“After removing pivotal support from the former 2020 low and 78.6% retracement of the rally from late last year at 1.3331/15, the loonie is now approaching the next important support from the ‘neckline’ to September 2019 base currently at 1.3269, where we might expect fresh buyers at first (in line with daily RSI approaching oversold territory again). Beneath here in due course though should further increase downside pressure and see support next at 1.3233.” 

“Big picture, the ‘measured wedge objective’ is seen lower at 1.3206, just shy of a more important support area at 1.3202/3191.” 

“Resistance is seen initially at 1.3308, then 1.3331/35, which we look to now ideally cap. Above would ease the immediate downside pressure and see resistance next at 1.3399, ahead of 1.3421, but with fresh sellers expected here.”