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USD/CAD saw a sharp jump higher on Wednesday, with 1.3254/72 ideally capping for a move back lower and to avoid a small base, in the opinion of the Credit Suisse analyst team. In fact, the loonie is trading around 1.3180 after posting a daily high of 1.3247.

Key quotes

“USD/CAD has seen a sharp rebound higher, breaking out of its near term consolidation range to see a test of the crucial 1.3254/72 resistance area (in line with daily MACD still moving higher). Our bias remains for this area to cap though and for weakness to resume, with support seen initially at 1.3227, then 1.3208/00. Removal of here would see a move back to 1.3128 and 1.3119, beneath which would see a fresh test of the back of the broken March downtrend at 1.3067. A close below here would then further reinforce the view that the medium-term downtrend is taking back over. Support is seen next at 1.3047/38, removal of which would reinforce the bearish bias further for a fall to 1.2994, then medium -term support at 1.2952.” 

“Above 1.3254/72 though on a closing basis would see a base complete to suggest a more important correction higher, with next important resistances seen at the 55 -day average at 1.3312 and then at the 50% retracement of the June fall at 1.3355.”