Clear close below 1.2686 / 82 will point to more weakness – Credit Suisse

USD / CAD continues to deteriorate as it closed below its late-January low on Tuesday, Credit Suisse analysts say. They estimate that a confirmation below 1.2686 / 82 would negate the base of the wedge formation and support at 1.2656 would appear on the scene.

Key statements:

“USD / CAD continues to deteriorate, further increasing the likelihood that the corrective rally has already come to an end and challenges the base of the ‘wedge’ (supported by daily MACD momentum which is also about to turn bass guitarist). Subsequently, the market went into a short-term consolidation phase this morning before the key low of 1.2686 / 82 “.

“Below 1.2686 / 82 I would see the base negated and suggest that a further decline is likely, with support then seen at the back of the December 2020 downtrend, currently at 1.2656 “.

Immediate resistance is seen at 1.2710, then 1.2766, above there would be a move back to 1.2783 / 87, where we would expect new supply to appear. However, the breakout here, would lead to 1.2828 / 33 below. Above 1.2845, we look for another test at 1.2870 / 81 and 1.2896 / 2907 “.

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