USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.0641; (P) 1.0696; (R1) 1.0797; More.

USD/CAD's break of 1.0678 minor support suggests that an intraday top is formed at 1.0779. Some more retreat might be seen but we'd expect strong support from 1.0544 support to bring rally resumption. Prior break of 1.0744 resistance confirm that whole correction pattern from 1.0851 has already finished at 1.0223. Above 1.0779 will target a retest of 1.0851 resistance next.

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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