USD/CAD Weekly Outlook

After consolidating sideway for most of the week, USD/CAD edged higher to 1.0242 on Friday. The break of 1.0214 resistance and the short term falling trend line argues that consolidation from 1.0326 could have completed at 1.0036 already. Having said that, initial bias is mildly on the upside this week for a retest of 1.0326 resistance first. Break will indicate whole rise from 0.9709 has resumed for 1.0378 resistance first. However, below 1.0146 will turn intraday outlook neutral again and suggests that consolidation from 1.0326 is still in progress. That is, more choppy sideway trading will be seen before breaking out.

In the bigger picture, the corrective nature of the fall from 1.0378 indicates that it's merely a correction, or part of consolidation, to whole rise from 0.9056. Failure below 1.0378 resistance suggests that such medium term rebound is not ready to resume yet. More choppy sideway trading could now be seen between 0.9709 and 1.0378. But still, further rally is in favor as long as 0.9709 support holds. Above 1.0378 will confirm whole rise from 0.9056 has resumed to 61.8% projection of 0.9056 to 1.0378 from 0.9709 at 1.0526 or higher. Though break of 0.9709 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.

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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