USD/CAD’s decline from 1.3897 resumed last week and dipped to as low as 1.3592. For now, strong support is still expected from 38.2% retracement of 1.3091 to 1.3897 at 1.3589 to contain downside and bring rebound. Break of 1.3711 minor resistance will turn bias back to the upside for retesting 1.3897. However, sustained break of 1.3589 will indicate that deeper correction is underway to 61.8% retracement at 1.3399 next.
In the bigger picture, corrective pattern from 1.3976 (2022 high) should have 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 is 61.8% projection of 1.2401 to 1.3976 from 1.3091 at 1.4064. This will 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 1.3126) holds.
