16 Jun 2015
USD/CAD could re-test 1.2835 – JP Morgan
FXStreet (Edinburgh) - In the view of analysts at JP Morgan, USD/CAD needs to clear the resistance band at 1.2618/1.2667 in order to allow a potential visit to 1.2835.
Key Quotes
“The recovery phase for USD/CAD above the May low suggests an improved short term setup tone but the medium term uptrend remains on hold for now”.
“In turn, there is an increased risk that a broad consolidation phase is forming below the March peak”.
“Importantly, the May low effectively held important support in the 1.1990/1.1820 zone. This area includes the uptrendline and key 38.2% retracement from the July ’14 low and should continue to hold to maintain the potential broad consolidation phase, as well as the risk for a return to the underlying uptrend”.
“The key upside levels remain well-defined highlighted by the 1.2618/1.2667 resistance area. This zone represents the April high and the 76.4% retracement of the decline from the March peak. Upside breaks would suggest a retest of the 1.2835 March high, if not an extension into the 1.31-1.32 zone (2008 high) in line with the medium term bullish bias”.
“A failure to hold the 1.18 support zone would confirm the onset of a deeper corrective phase with an increased risk for an extension into the 1.14- 1.15 zone (December breakout area)”.
Key Quotes
“The recovery phase for USD/CAD above the May low suggests an improved short term setup tone but the medium term uptrend remains on hold for now”.
“In turn, there is an increased risk that a broad consolidation phase is forming below the March peak”.
“Importantly, the May low effectively held important support in the 1.1990/1.1820 zone. This area includes the uptrendline and key 38.2% retracement from the July ’14 low and should continue to hold to maintain the potential broad consolidation phase, as well as the risk for a return to the underlying uptrend”.
“The key upside levels remain well-defined highlighted by the 1.2618/1.2667 resistance area. This zone represents the April high and the 76.4% retracement of the decline from the March peak. Upside breaks would suggest a retest of the 1.2835 March high, if not an extension into the 1.31-1.32 zone (2008 high) in line with the medium term bullish bias”.
“A failure to hold the 1.18 support zone would confirm the onset of a deeper corrective phase with an increased risk for an extension into the 1.14- 1.15 zone (December breakout area)”.