USD/CAD: Threat of a premature resumption of the bear trend rises decisively – Credit Suisse

USD/CAD maintains a base to suggest further corrective strength, with key resistance seen at 1.3421 while key support stays at 1.3247/41, per Credit Suisse. 

Key quotes

“USD/CAD saw a sharp rejection from price resistance at 1.3421 and the 61.8% retracement of the June/September fall at 1.3440 earlier in the week, which increases the risk of an earlier than anticipated resumption of the core bear trend.”

“Whilst above the ‘neckline’ to the base at 1.3247/41, we remain biased for further corrective strength, with resistance seen initially at the aforementioned 1.3421 and 1.3340. Removal of here would expose the late July highs at 1.3451/60 next, ahead of the “measured base objective” and 200-day average at 1.3496/3529, where we would look for a cap for the medium-term downtrend to then reassert itself.

“In contrast, a clear and closing break below 1.3247/41 would negate the small base to suggest a direct resumption of the medium-term bear trend, with support seen next at 1.3171/69.”