USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.0542; (P) 1.0591; (R1) 1.0618; More.

USD/CAD's break of 1.0638 minor resistance indicates that pull back from 1.0720 has likely completed at 1.0544 already. Intraday bias is flipped back to the upside. Break of 1.0720 will bring rally resumption to 1.0744 resistance first. As discussed before, break there will confirm that whole correction pattern from 1.0851 has already finished at 1.0223 and will bring stronger rally to retest this resistance next. On the downside, in case of another fall, we'd continue to expect strong support from 38.2% retracement of 1.0223 to 1.0720 at 1.0530 and bring rebound.

In the bigger picture, we're still favoring the case that whole medium term fall from 1.3063, which is viewed as a correction to long term rise from 0.9056, has completed at 1.0205 already. Break of 1.0851 will confirm this case by completing a double bottom reversal pattern (1.0205, 1.0223). In such case stronger rally should be seen to 61.8% retracement of 1.3063 to 1.0205 at 1.1971 at least. Also, in such case, we'll tentatively treat rise from 1.0205 as resumption of the whole up trend from 2007 low of 0.9056 and focus on the structure of the rise from 1.0205 for confirmation.

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