USD/CAD accelerates its fall to test the key 1.2365 support – Credit Suisse

With commodities surging and completing a long-term base, high beta and particularly the commodity currencies should benefit. The USD/CAD pair fell sharply yesterday, finally picking up downside momentum after the recent cross lower in daily MACD. Economists at Credit Suisse look for a break below support at the 2021 low at 1.2365, which should open up a move to the 2018 corrective low at 1.2258/51.

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USD/CAD finally saw an acceleration of downside momentum, with key support at 1.2365

“USD/CAD finally saw an acceleration of downside momentum yesterday, in line with its large bearish ‘outside day’ and recent cross lower in daily MACD momentum.” 

“We stay bearish, with the next important support seen at the current year low at 1.2365, where we would expect to see another temporary pause. Post this pause, the next major support below here is seen at a major corrective price low at 1.2265/51, which is similarly expected to prove a tough initial barrier. Nevertheless, with a major long-term top in place, we still see scope for an eventual move to 1.2062, the 2017 low.” 

“Near term resistance moves to 1.2455/73, which we expect to cap on any rebound from 1.2365. Above this resistance would suggest further ranging though, which is not our base case.”