USD/CAD: Risk of corrective rise increases – Credit Suisse

USD/CAD, which up until recently remained in a clear downtrend, has now seen a bullish MACD cross and small bullish ‘outside day’ to increase the risk of a corrective rise, with a move above 1.3243/45 confirming a leg higer to 1.3356/61, analysts at Credit Suisse report. 

Key quotes

“USD/CAD continues to stall around the 200-week average at 1.3170 and has posted a bullish ‘outside day’ rejection from the recent low at 1.3135/33. Furthermore, MACD has now bullishly crossed higher to bring it into line with the majority of other USD pairs which also show a tiring momentum picture. All in all then, the risk of a deeper corrective move back higher seems to have grown, although only a move above resistance at 1.3243/45 would this, which includes the 13 -day exponential average, which has been a good barometer over the past month.” 

“Next resistance above 1.3243/45 is then seen at 1.3272, before 1.3356/61.” 

“A break below 1.3135/33 would suggest the downtrend is resuming for a move back to 1.3105, with scope for the 61.8% retracement of the entire 2017/2020 upmove at 1.3057. We expect to see a lengthier pause here, particularly with another key support just below at the 1.2952 price low.”