USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.0007; (P) 1.0061; (R1) 1.0131; More.

USD/CAD's break of 1.0081 resistance is taken as the first signal that correction from 1.0322 has completed with three waves down to 0.9974. Intraday bias is flipped to the upside and further rally should now be seen towards 1.0230 resistance first. Break will confirm this case and encourage stronger rally towards 1.0230 resistance. On the downside, while another fall cannot be ruled out, as discussed before, price actions from 1.0322 is still treated as correction to rally from 0.9818 only as long as 0.9957 support zone (100% projection of 1.0322 to 1.0048 from 1.0230 at 0.9964) holds.

In the bigger picture, after all, USD/CAD is still staying in established range of 0.9709 and 1.0378. The corrective nature of the price actions inside this range argues that it's merely consolidation to the whole rebound from 0.9056. While further choppy sideway trading could still be seen, the rise from 0.9056 is still expected to extend further as long as 0.9709 support holds. Break of 1.0378 will bring rise to 61.8% projection of 0.9056 to 1.0378 from 0.9709 at 1.0526 and above. Though, break of 0.9709 support will indicate that the correction from 0.9056 could have completed and short term bias will then be turned back to the downside for retesting this low.

Subscribe to our daily and mid-day newsletter to get this report delivered to your mail box