USD/CAD’s strong rally and break of 1.3455 resistance argues that consolidation pattern from 1.3534 is completed at 1.3222 already. Rises from 1.2968 and 1.2460 are likely resuming. Further upside should be seen to 1.3598 and then 1.3838 fibonacci level ahead.
Initial bias in USD/CAD remains on the upside this week for 1.3534 resistance first. Break will target 1.3598 key resistance next. Firm break there will confirm resumption of whole rise from 1.2460 to next medium term fibonacci level at 1.3838. On the downside, below 1.3456 minor support will turn intraday bias neutral and bring consolidation. But retreat should be contained well above 1.3222 support and bring another rally.
In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg from 1.2460 is likely still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. We’d look for reversal signal there to start the third leg. However, break of 1.2968 will argue that the third leg has already started and should at least bring a retest of 1.2460 low. Meanwhile, sustained trading above 1.3838 would pave the way to retest 1.4689 high.
In the longer term picture, rise from 0.9056 (2007 low) is viewed as a long term up trend. It’s taking a breath after hitting 1.4689. But such rise expected to resume later to test 1.6196 down the road.
