USD/CAD’s July failure at the psychological 1.1000 level has forced it back below the 200 day moving average, 38.2% Fibonacci retracement of the March-to-July descent. This is why we have neutralised our short term forecast. Should a daily close below the current August low at 1.0861 be seen, the 1.0824/11 support zone, made up of the May lows and the 55 day moving average, will be in focus.
Once the consolidation has ended and the current August high at 1.0997 been overcome, the 1.1027/52 resistance area will be targeted. It is where the 61.8% Fibonacci retracement and the late April high meet. Another medium term upside target is the 1.1224/78 resistance area where the 50% retracement, January and March highs can all be seen. We will keep our bullish forecast while the 2012-14 uptrend line at 1.0693 holds.
Commerzbank