USD/CAD: A base remains in place at 1.3247 to signal further corrective strength – Credit Suisse

USD/CAD maintains a base to suggest further corrective strength, with key resistance at 1.3421, whilst key support to maintain the base is at 1.3247/41, per Credit Suisse.

Key quotes

“USD/CAD is consolidating near term post a sharp rejection from price resistance at 1.3421 and the 61.8% retracement of the June/September fall at 1.3440 last week, keeping us alert for and greatly increasing the risk of an earlier than anticipated resumption of the core bear trend (see below). Nevertheless, whilst above the “neckline” to the base at 1.3247/41, we stay mildly biased for further corrective strength, with resistance seen initially at the aforementioned 1.3421 and 1.3440.”

“Removal of 1.3440 would expose the late July highs at 1.3451/60 next, ahead of the ‘measured base objective’ and 200-day average at 1.3496/3531, where we would look for a cap for the medium-term downtrend to then reassert itself.” 

“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.”