USD/CAD’s rise from 1.3091 resumed last week and surged to 1.3784, before retreating. Initial bias stays neutral this week first, and more consolidations could be seen below 1.3784. While deeper pull back cannot be ruled out, outlook will stay bullish as long as 1.3378 support holds. Above 1.3778 will resume the rally from 1.3091 and target 100% projection of 1.3091 to 1.3693 from 1.3378 at 1.3980.
In the bigger picture, current development revives the case that corrective pattern from 1.3976 (2022 high) has completed with three waves down to 1.3091. Decisive break of 1.3976 high will confirm resumption of up trend from 1.2005 (2021 low). Next target will be 61.8% projection of 1.2401 to 1.3976 from 1.3091 at 1.4064. This will now remain the favored case as long as 1.3378 support holds.
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 1.3100) holds.
