Monday’s rally in USDCAD has taken it above key resistance to establish a large medium-term base, according to David Sneddon and his team at Credit Suisse in London.
Sneddon says USDCAD has overcome resistance at 1.2920/27 – which came from the 50% retracement of the May to September bear trend and the December 2017 series of price highs – to establish a large medium-term base (see Chart). He says this price action turns the core trend bullish with initial targets of 1.3015/17 and then 1.3065, the 38.2% retracement of the 2016/2017 bear trend. Above this, resistance can be found at 1.3132 (the 61.8% retracement of the decline from last May) and thereafter the trendline down from 2016 (now at 1.3216), which Sneddon sees as a stronger barrier.
Sneddon thinks support at 1.2916 should hold, though if broken USDCAD would likely fall towards 1.2870/69 and then 1.2809/1.2799.