USD/CAD to confirm a bear ‘wedge’ continuation pattern below 1.3501/3486 – Credit Suisse

USD/CAD is retracing from the 1.3625 as expected by analysts at Credit Suisse and now trades at 1.3586. Below 1.3501/3486, the loonie would confirm a bear wedge. 

Key quotes

“USD/CAD has seen a strong rebound from the 50% retracement of the correction higher from June at 1.3516, however, we look for 1.3624/28 to ideally cap the market, although we do not rule out a move to the lower end of the potential bear ‘wedge’ continuation pattern at 1.3686.” 

“Post the correction, we look for a move back lower, in line with our bias that the recent price action looks like a potential bear ‘wedge’ continuation pattern and we thus expect further weakness to unfold, also in line with the existing large bearish ‘descending triangle’ continuation pattern.” 

“Below 1.3516, we see support at the pivotal 200-day average and June low at 1.3501/3486, where we would expect a first attempt to hold. Removal of here in due course would then trigger the pattern to suggest the core bear trend is resuming, with support seen thereafter at 1.3469.”