USD/CAD edged higher to 1.3686 last week but turned sideway since then. Initial bias remains neutral this week first. For now, risk will remain on the upside as long as 1.3315 support holds and another rally is in favor. On the upside, break of 1.3686 will extend the rebound to 38.2% retracement of 1.4667 to 1.3315 at 1.3831.
In the bigger picture, the rise from 1.2061 (2017 low) could have completed at 1.4667 after failing 1.4689 (2016 high). Fall from 1.4667 could be the third leg of the corrective pattern from 1.4689. Deeper fall is expected to 61.8% retracement at 1.3056 and possibly below. This will now remain the favored case as long as 1.3855 support turned resistance holds. However, sustained break of 1.3855 will turn focus back to 1.4689 key resistance.
In the longer term picture, the bullish case of resuming the up trend from 0.9506 (2007 low) is delayed. Consolidation from 1.4689 is extending for another medium term fall. As long as 1.2061 support holds, such up trend should still resume through 1.4689 at a later stage.
