USD/CAD: Downside correction to end, open path towards the 1.3067 mark – DBS Bank

USD/CAD’s sharp rally from 1.2007 to 1.2807 over the last two months has seen a relief decline, likely masked within a minor correction. In the view of Benjamin Wong, Strategist at DBS Bank, USD remains in a buy mode as long as the correction does not sustain losses under 1.2407 and 1.2356, which houses the moving averages support.

Buy USD dips remains the play

“The move to 1.2422 shied off an attack at 1.2407, that marks the Kijun support on the weekly Ichimoku charts – this should be a telling sign that USD/CAD is maintaining a bullish large base, as our prior guidance argued for a prolonged USD basing.”

“What matters now is that USD holds support at 1.2407, as well as 1.2356 where it draws in support from the convergence of the 50-day moving average (DMA) and 100-DMA. That would place in play the projection of a neckline breach, which exposes a path towards the key moving average confluence zone around 1.3067 on the weekly charts.”