USD/CAD: Downtrend resistance at 1.3183 caps with support seen at 1.3038 – Credit Suisse

The USD/CAD pair has weakened further below the 1.3100 mark and is now trading near daily lows around 1.3080 after reaching a daily high at 1.3162. Economists at Credit Suisse look for the downtrend from March at 1.3183 to cap for an eventual test of medium-term support at 1.2952.

Key quotes

“USD/CAD has extended its rebound for a test of the 23.6% retracement of the fall from June and price resistance at 1.3162/67. With the downtrend from March not far above at 1.3183, we look for this 1.3162/83 to now ideally cap further strength and for the risk to turn lower again.” 

“Near-term support moves to 1.3087, but with a break below 1.3038 needed to reassert a bearish bias again for a fall back to 1.2994, then medium-term support at 1.2952. Beneath here would suggest we are seeing the formation of a significant and long-lasting top with support seen next at the downward sloping trendline from February 2019, currently seen at 1.2867, with the 78.6% retracement of the 2017/2020 bull trend seen at 1.2620.” 

“Above 1.3183/91 would see the downtrend break to suggest a more important low is already in place with resistance seen next at 1.3205, then the late August high at 1.3245.”