USD/CAD extends its dramatic retreat from the spike high at the end of last week at 1.2950. Economists at Credit Suisse see scope for further weakness to the 38.2% retracement of the June/August uptrend at 1.2590, potentially the uptrend and 200-day average at 1.2564/53, but with this latter area then ideally holding.
See: USD/CAD may suffer a major fall to the 1.20 level – Commerzbank
Resistance seen at 1.2662 initially
“Weakness can extend further yet to the 38.2% retracement of the June/August rally at 1.2590. Indeed, we see scope for an overshoot below here to the uptrend from the June low and 200-day average at 1.2564/53, but with a better floor here.
“A close below the 200-day average at 1.2553 would suggest the basing effort is probably over, with support seen next at 1.2479/74.”
“Resistance is seen at 1.2662 initially, above which can ease the immediate downside bias for a recovery back to 1.2711 ahead of 1.2748 and then 1.2779.”
“A break above 1.2836 is needed to reassert the uptrend again for a move back to 1.2950/57 and eventually 1.3024.”