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USD/CAD has closed clearly above the 55-day average at 1.2265, which hadn’t been sustainably breached previously this year. As the Credit Suisse analyst team notes, this signals a 1-2 month trend change, particularly given that daily MACD has also turned bullish.

Support moves to 1.2264/61

“USD/CAD has surged higher again, breaking above 1.2203/05 as well as above 1.2264, which includes the important 55-day average, the 38.2% retracement of the fall from April and the ‘measured base objective’. The 55-day average has essentially capped the market all year and so the sustained move above here marks an important change of trend for the next 1-2 months, reinforced by the cross higher in daily MACD.”

“Next resistance is seen at 1.2405/19, then 1.2500/14, with the potential for a move back to the major cluster of resistances at 1.2639/53, which is a major medium to long-term inflection point.”  

“Near-term support moves to 1.2264/61, which now ideally holds to keep the risks directly higher. A quick close below here would suggest the market is moving into a choppy broad range, with next resistance at the recent breakout point at 1.2156/45.”