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Dollar/CAD and also EUR/USD experienced interesting technical moves in the past week. What does the road ahead have for them?

The team at Bank of America Merrill Lynch provides some insight:

Here is their view, courtesy of eFXnews:

USD/CAD is testing pivotal long-term support at the 1.1909/1.1915 area, notes Bank of America Merrill Lynch.

“While this is a very late stage decline, this support zone is unlikely to hold for long, given the weakened state of the USD,” BofA argues.

“Indeed, a break below 1.1909 clears the way for a test of the 200d at 1.1764 before renewed base,” BofA projects.

EURUSD daily chart May 2015 technical levels resistance support euro dollar Merrill Lynch

Turning to EUR/USD, BofA thinks that it’s time to get back to the drawing board with fresh thoughts after exiting its short EUR/USD on the overnight push above 1.1392.

This break points to a larger upward correction than anticipated and further gains for a test of 1.1534/1.1538 resistance (Feb-03 high and 10m trendline),” BofA argues.

While this may be a near-term sticking point, absent a break below 1.1156 (old channel resistance, now support), stay bullish for a push towards 1.1675/1.1811, potentially the 200d at 1.1961 before renewed signs of stalling,” BofA advises.

“Back below 1.1156 says the correction is over,” BofA adds.

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