USD/CAD fell sharply on Friday and has tested significant near-term support at 1.2864/58 on Monday. A break below here would signal a swing lower within the channel, analysts at Credit Suisse report.

Immediate resistance moves to 1.2933/34

“A sustained close below the recent price low at 1.2864/58 would signal a failure to break above 1.3077/3100 and prompt another swing back lower within the gently upward sloping mean-reverting channel, with next support seen at 1.2680/71.” 

“Should weakness extend directly below 1.2680/71 as well, this would promote further downside towards a major support zone at the bottom of the channel at 1.2515/2400, which we would certainly expect to hold.” 

“Immediate resistance moves to 1.2933/34 and next to the recent price high and retracement resistance at 1.3017/38. A move above here would open the door to the top of the channel at 1.3077/3104, which has to hold to maintain the mean-reverting regime and prevent a major medium-term breakout to the upside. Should this take place though, we would look for a quick move to the next resistance at 1.3334.”