USD/CAD jumped above 1.3100/23 last week but did not manage to close above this level. Analysts at Credit Suisse expect the pair to continue to consolidate from here.

Break below 1.2816/01 to signal a deeper move lower

“USD/CAD spiked sharply above 1.3100/23 late last week but has not managed to close above this level. Given this development and the mean-reverting environment that the market has been in since H2 of 2021, we stay with our neutral outlook and look for further consolidation below 1.3100/23.” 

“A close below 1.2935/11 is still needed to reduce the upside risk, though only a break below the recent low at 1.2816/01 would signal a mean-reversion back towards the bottom of the channel, with next support then seen at 1.2771/52.” 

“Only a sustained move above 1.3127 would make room for further upside to the new YTD high at 1.3200/23. Nonetheless, with the current volatile environment in mind, we would stay wary of a potential mean-reversion back lower.”