USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.0458; (P) 1.0495; (R1) 1.0527; More.

USD/CAD's sharp fall from 1.0779 extended further to as low as 1.0411 in early US session. The strong break of 61.8% retracement of 1.0223 to 1.0779 at 1.0435 argues that whole rise from 1.0233 should have completed. Fall from 1.0779 is either start of a new down trend or part of the consolidations pattern that started at 1.0205. In any case, intraday bias remains on the downside and further decline could now be seen towards 1.0205/23 support zone. On the upside, break of 1.0577 resistance is needed to indicate that fall from 1.0779 has completed. Otherwise, risk will now remain on the downside even in case of recovery.

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. But a break of 1.0851 resistance is needed to confirm this case. In such case stronger rally should be seen to 61.8% retracement of 1.3063 to 1.0205 at 1.1971 at least. On the downside, however, break of 1.0205 low will invalidate this view and target parity instead.

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