USD/CAD grinds lower, potentil slump towards 1.3331 on a break of 1.3482 – Credit Suisse

The bearish ‘descending triangle’ continuation pattern is sending the loonie lower step by step, currently trading at 1.3549. The Credit Suisse analyst team expects the USD/CAD pair to slide towards 1.3331 on a break below 1.3482.  

Key quotes

“USD/CAD is slowly grinding lower, in line with the large bearish ‘descending triangle’ continuation pattern that is still in place. We expect this path to continue and see scope for further weakness, with support initially at 1.3505, then 1.3482/75. Removal of here would see the small base negated and a fresh attempt at 1.3398, then 1.3365/57, ahead of the ‘neckline’ to the November/December 2019 base and 78.6% retracement of the 2020 surge at 1.3331/16, which may continue to prove a tough barrier.”

“Resistance is seen at 1.3636/37, ahead of 1.3686, which ideally caps to maintain the immediate downside bias. Removal of here though could see a move back to the more important breakout point at 1.3851/56, which ideally then caps any further upside.”