USD/CAD Daily Outlook

Daily Pivots: (S1) 1.1403; (P) 1.1528; (R1) 1.1620; More.

As mentioned before, a short term top might be in place at 1.1653 on bearish divergence conditions in 4 hours MACD and RSI, just ahead of 38.2% retracement of 1.3063 to 1.0784 at 1.1655. Further consolidation might be seen, with risk of another pull back. But downside is expected to be contained by 1.1226 clusters support (50% retracement of 1.0784 to 1.1653 at 1.1219) and bring rally resumption. Above 1.16530 will bring a test of 1.1814 resistance. However, note that a break of 1.1226 will be an important signal that whole rebound from 1.0784 has completed and will turn outlook bearish for retesting this low.

In the bigger picture, fall from 1.3063 is treated as correction to impulsive rally from 0.9056 to 1.3063 and has met target support zone of 1.0297/0819 already. We're slightly favoring the case that such correction has completed at 1.0784 already. Break of mentioned 1.1475/1.1814 resistance zone will confirm this case and should at least bring strong rally to key cluster resistance at 1.2191 (61.8% retracement of 1.3063 to 1.7084 at 1.2192). Nevertheless, a break below 1.1226 cluster support will indicate that such rise from 1.0784 has completed. In addition, the corrective structure will aurge that fall from 1.3063 is still in progress, probably to 61.8% retracement of 0.9056 to 1.3063 at 1.0587 before completion.

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