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The USD/CAD pair, which is trading in the neutral territory around the 1.3180 region, needs to see a move below the back of the broken March downtrend at 1.3104 to confirm that the corrective setback higher is finally over, according to the Credit Suisse analyst team.

Key quotes

“Although another corrective jump higher should not be excluded the market seems to have shifted into a short-term range. A close beneath 1.3104 is needed to reinforce the view that the corrective strength is over and the medium-term downtrend is taking back over. Support is seen thereafter at 1.3088/76, beneath which should allow for a move back to 1.3047/38. Removal of here would then reinforce the bearish bias further for a fall to 1.2994, then medium-term support at 1.2952.”

“Resistance moves initially to 1.3166, then 1.3200/08, then back to 1.3256/72, which ideally caps again. Above here though on a closing basis would see a base complete to suggest a more important correction higher, with next important resistances seen at the 50% retracement and 55-day average at 1.3332/55.”