USD/CAD: Near-term setback higher faces resistance at 1.2741/46 – Credit Suisse

The USD/CAD pair has not managed to follow through on the downside, completing a bullish “hammer” to suggest near-term upside, with resistance at 1.2741/46, per Credit Suisse.

Key quotes

“USD/CAD has not managed to see a close beneath the crucial 1.2686/82 level, reverting back higher and completing a small bullish ‘hammer’ to suggest further near-term upside.” 

“We see room for a move back to key short-term averages at 1.2741/46, with scope for an overshoot to the 55-day average at 1.2770, which then ideally caps for a move back lower. Post this setback higher, we look for weakness to resume and look for an eventual close beneath the crucial 1.2686/82 lows.” 

“A clear and sustained close beneath 1.2686/82 would see the prior base negated, with support seen thereafter at the back of the December 2020 downtrend, currently at 1.2640.” 

“Above 1.2770/83 would suggest a deeper correction higher, with resistance seen thereafter at 1.2845, then more importantly at 1.2881. Above here would complete a larger base, however this is not our preferred scenario.”