USD/CAD: Risk of a drop towards the Oct low at 0.9892 remains

By commerzbank

USD/CAD continues to oscillate around the 200 day moving average at 0.9985 and has done so for over one week, comments Karen Jones, analyst at Commerzbank. “Scope remains for a slide back to the October low at 0.9892 which is expected to hold the downside”.

According to the analyst, the market will find initial resistance at the December low and the 3rd January low at 1.0049/73, but key short term resistance is the 55 day ma and the 3 month downtrend at 1.0149/46. “This will need to be overcome for immediate downside pressure to diminish, something which is not likely to be seen this week, however”, said Jones.

“Only an unexpected drop and two daily closes below the October low at 0.9892 would point towards further range trading with a bearish bias, something we do not envisage happening at present”, Commerzbank analyst concluded.

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