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USD/CAD has lost significant short-term momentum. Whilst the medium-term bias stays bearish, analysts at Credit Suisse are concerned about the potential for a near-term correction back higher, with key resistance at 1.2145/54.

Support is at 1.2060/48

“Short-term momentum has turned and the minor RSI divergence remains in place, which suggests we could see a deeper correction higher now. A break above 1.2143/63 would confirm this, which is the recent high and 13-day exponential average. Above here would open up a move to 1.2203 next, then 1.2257, with 1.2352 the deepest correction we can envisage.”

“Bigger picture, we look for an eventual resumption of the strong medium-term downtrend, with a weekly close below 1.206 0/4 8 needed to confirm a multi-year ‘double top’ and end thoughts of a correction, as well as dramatically reinforce our medium term bearish outlook, with the next level at 1.1916.”  

“Bigger picture, we still see scope for an eventual move to 1.1424/1318.”