Daily Pivots: (S1) 1.3263; (P) 1.3299; (R1) 1.3324; More…
USD/CAD’s sharp decline and break of 1.3187 support today confirms short term reversal, after rejection by 1.3385 key resistance. Intraday bias is turned to the downside for 38.2% retracement of 1.2781 to 1.3359 at 1.3138 first. Break will target 61.8% retracement at 1.3002. On the upside, break of 1.3385 resistance is needed to confirm upside momentum. Otherwise, risk will stay on the downside even in case of strong rebound.
In the bigger picture, current development argues that medium term corrective pattern from 1.3385 is extending with another falling leg. While deeper decline could be seen, downside should be contained by 50% retracement of 1.2061 to 1.3385 at 1.2723 to bring rebound. An eventual upside break out is still expected to 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685, at a later stage.
