USD/CAD fell sharply last week. The pair is testing the lower edge of the recent range at 1.2587/79. Economists at Credit Suisse look for the market to hold above here to maintain the range, with a break above 1.2645/59 needed to cement a floor at this key level.

A close below 1.2579 would clear the way for a fall to the YTD lows at 1.2450/48 

“USD/CAD is challenging important support at the lower boundary of the recent range at 1.2587/79, which includes the recent price low and the uptrend from June 2021. We expect this level to hold for a bounce back to the middle of the range, with resistance seen at 1.2645/59 initially, then at 1.2693/98 and eventually at the recent price high at 1.2775/78.

“Above 1.2775/78 would raise the risk of a more sustained turn back higher again and clear way to challenge last week’s high at 1.2867/71, which we would then expect to break for a renewed attempt to test the YTD high at 1.2895/2901.”

“A sustained close below 1.2587/79 would warn of a deeper setback within the broader range, with support then seen at 1.2557/52 initially, then at 1.2483 and eventually at the YTD lows at 1.2450/48, which we expect to hold at the very latest.”