USD/CAD rebounded strongly to 1.3386 last week, but failed to sustain above 55 D EMA (now at 1.3366), and retreated deeply. Initial bias is turned neutral this week first. On the upside, break of 1.3386 and sustained trading above 55 D EMA will argue that whole corrective pattern from 1.3976 has completed with three waves down to 1.3115. Further rally should then be seen to 1.3653 resistance next. Nevertheless, break of 1.3202 support will bring retest of 1.3115 low instead.
In the bigger picture, price actions from 1.3976 are viewed as a correction to up trend from 1.2005 (2021 low) only. Hence, the up trend is in favor to resume through 1.3976 at a later stage. Nevertheless, another fall below 1.3115 will extending the decline from 1.3976 to 61.8% retracement of 1.2005 to 1.3976 at 1.2758, and raise the chance of bearish trend reversal.
In the longer term picture, price actions from 1.4689 (2016 high) are seen as a consolidation pattern only, which might have completed at 1.2005. That is, up trend from 0.9506 (2007 low) is expected to resume at a later stage. This will remain the favored case as 55 M EMA (now at 1.3048) holds.
, and retreated deeply. Initial bias is turned neutral this week first. On the upside, break of 1.3386 and sustained trading above 55 D EMA will argue that whole corrective pattern from 1.3976 has completed with three waves down to 1.3115. Further rally should then be seen to 1.3653 resistance next. Nevertheless, break of 1.3202 support will bring retest of 1.3115 low instead.){kind=link}