USD/CAD Weekly Outlook

USD/CAD's choppy consolidative trading continued last week, without making any progress. The flag like pattern from 1.0326 suggests that it's merely consolidation to rise from 0.9709 only. Though there is no indicate of completion yet, such consolidation should be contained well above 0.9709 support and bring rally resumption. Break of 1.0242 resistance will be an important signal that such consolidation has completed and will encourage further rise to 1.0378 resistance and then 61.8% projection of 0.9056 to 1.0378 from 0.9709 at 1.0526.

In the bigger picture, the corrective nature of the fall from 1.0378 to 0.9709 indicates that it's merely a correction, or part of consolidation, to whole rise from 0.9056. Such rebound from 0.9056 is expected to extend further to to above 61.8% projection of 0.9056 to 1.0378 from 0.9709 at 1.0526 on resumption. Though, break of 0.9709 support 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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