USD/CAD set to trend higher as 1.2781/63 holds – Credit Suisse

USD/CAD has seen an initial rejection from the major band of resistance at 1.2950/3030. However, 1.2781/63 is expected to floor the market, according to the Credit Suisse analyst team.

Upside bias while above 1.2781/63

“USD/CAD has seen an initial rejection from very important medium-term resistance levels at 1.2950/1.3030. However, whilst the market holds above 1.2781/63, we lean towards a breakout above this zone, given that medium-term momentum remains firmly bullish and given that medium-term moving averages are all now rising.” 

“Above 1.3030 would confirm that the medium-term risks are turning higher, with the next notable resistance at 1.3172 and eventually 1.3337 if a breakout is confirmed.” 

“Near-term support stays at 1.2781/63, which we now look to hold to maintain the upward pressure. In contrast, a closing break below 1.2614/08 would turn the risks back lower within the range, however, this is not our base case.”