USD/CAD’s rebound from 1.2061 extended higher last week. The development argues that the pair has successfully defended 1.2048 fibonacci level. Further rise is expected this week as long as 1.2326 minor support holds, for 1.2777 resistance first. Decisive break there will target 38.2% retracement of 1.4689 to 1.2061 at 1.3065 next. However, break of 1.2326 will dampen this bullish view and turn bias back to the downside for 1.2061 instead.
In the bigger picture, current development argues that USD/CAD has defended 50% retracement of 0.9406 (2011 low) to 1.4869 (2016 high) at 1.2048. And with 1.2048 intact, we’d favor the case that fall from 1.4689 is a correction. Break of 1.2777 will further affirm this bullish case. That is, larger up trend from 0.9406 is not completed. However, on the other hand, firm break of 1.2048 will indicate that fall from 1.4689 is at least a medium term down trend and should target 61.8% retracement at 1.1424 and below.
In the longer term picture, the long term outlook is turned a bit mixed. As noted above, 50% retracement of 0.9406 to 1.4869 at 1.2048 is a key level to determine whether up trend from 0.9056 (2007) has already completed.
