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USD/CAD has turned back lower, but short-term momentum remains a concern, leaving analysts at Credit Suisse disinclined to chase the move lower in the short-term.

USD/CAD is edging lower again, however, there are concerns about short-term momentum

“USD/CAD is edging lower within its range, which is centered around regime defining long-term support at 1.2060/48, which includes the 2017 low and 50% retracement of the rise from 2011. Short-term momentum has turned and the minor RSI divergence remains in place, which leaves us reluctant to chase the move directly lower from here.”

“A direct break below 1.2012/00 should still reassert the broader downtrend and end thoughts of a correction, with a weekly close below 1.2060/48 then needed to confirm a multi-year ‘double top’, 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.”  

“A break above 1.2135/45 would confirm a deeper correction back higher, 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.”