USDCAD looks as though it has confirmed a top. A break below 55-Day Moving Average (DMA) at 1.3455 would act as a leading signal for a broader turn, analysts at Credit Suisse report.

Bearish “head and shoulders” top

“USDCAD looks to have formed a bearish ‘head and shoulders’ top and with weekly MACD now also rolling over, a further decline looks to be an increasingly likely scenario. However, we keep our core bullish view intact for now and see the 55DMA at 1.3455 as the last line of defence to avoid a stronger shift lower.” 

“Back above 1.3625 and next above 1.3657/74 is needed to relieve some downside pressure and put the market back towards the middle of the recent range.” 

“A close below 1.3455 would confirm the turn lower and suggest further decline towards the 50% retracement of the rise form August and trendline support at 1.3351/3289 initially.”