USD/CAD resumes the bear trend after breaking below the 55-DMA at 1.3247 – Credit Suisse

USD/CAD has broken beneath the 55-day average at 1.3247/42, confirming a more direct resumption of the medium-term bear trend. Analysts at Credit Suisse see the next support at 1.3157, then a cluster of price supports at 1.3128/19. 

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Key quotes

“USD/CAD has seen a sharp fall and closed beneath the crucial ‘neckline’ to the small base and 55-day average at 1.3247/42, negating the former base and confirming a more direct resumption of the medium-term bear trend.”

“We now expect to see a fall back to 1.3171, ahead of the 61.8% retracement of the September surge at 1.3157. Beyond here can see a move back to a cluster of price supports at 1.3128/19, removal of which could open the door for a fall back to 1.3047/45.”

“Bigger picture, further weakness from current levels could be the start of the ‘right shoulder’ to much larger long term top, in which case weakness should accelerate sharply from here.” 

“Resistance moves initially to 1.3202, then 1.3251, ahead of 1.3273, above which now would ease the immediate downside pressure and see a move back to 1.3341, where we would expect to see a cap at first.”