USD/CAD Weekly Outlook

USD/CAD rebounded strongly last week after edging lower to 0.9920. Such rebound argues that correction from 0.9871 is still in progress. Initial bias is on the upside this week and break of 1.0126 cluster resistance (50% retracement of 1.0378 to 0.9781 at 1.0125) will confirm this case and encourage further rise towards 100% projection of 0.;9871 to 1.0126 rom 0.9920 at 1.0175. On the downside, below 1.0029 will turn intraday outlook neutral again. But break of 0.9920 is still needed to indicate fall from 1.0378 has resumed for 0.9756 support.

In the bigger picture, rebound from 0.9056 made a top at 1.0378 with bearish divergence condition in daily MACD. Even though impulsive nature of the fall from 1.0378 argues that such correction has already completed after meeting target of 1.0339 support turned resistance, it's not confirmed at. Break of 0.9756 is needed to confirm this case and encourage retest of 0.9056 low. Meanwhile, above 1.0378 is also needed to confirm rise from 0.9056 has resumed. Otherwise, more choppy sideway trading should be seen between 0.9756 and 1.0378.

In the longer term picture, a medium term bottom is in place at 0.9056 after USD/CAD just missed double projection target of 161.8% projection of 1.4006 to 1.1716 from 1.2737 at 0.9032 and 161.8% projection of 1.2737 to 1.0930 from 1.1874 at 0.8950. But with key medium term resistance zone of 1.0930, 38.2% retracement of 1.4006 to 0.9056 at 1.0947 and 50% retracement of 1.2737 to 0.9056 at 1.0897 remains intact, the long term down trend from 1.6196 is still in force.

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