USD/CAD’s recovery from 1.3016 extended higher last week despite week upside momentum. Further rally is in favor this week to 1.3564/3664 resistance zone. On the downside, however, break of 1.3105 support will turn bias back to the downside for retesting 1.3016 low instead.
In the bigger picture, focus stays on 1.3068 cluster support (38.2% retracement of 1.2061 to 1.3664 at 1.3052). Decisive break there will confirm completion of up trend from 1.2061 (2017 low). Further fall should be seen to 61.8% retracement at 1.2673 next. Strong rebound from there will retain medium term bullish. But sustained break of 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685, is needed to confirm resumption of up trend from 1.2061 (2017 low). Otherwise, risk will stay on the downside.
In the longer term picture, outlook remains unchanged that price actions from 1.4689 (2016 high) are forming a corrective pattern. Rejection by 1.3793 resistance would raise the chance of lengthier extension, with risk of dropping through 1.2061 low before completion.
