USD/CAD Weekly Outlook

USD/CAD strengthened mildly last week but lacked following through momentum yet. favor is still in the case that correction from 1.0322 has already completed at 1.0048 already. But a break of 1.0238 resistance is needed to confirm that rise from 1.0048 has resumed for retesting 1.0322 first. Break will bring stronger rally to upper end of medium term range near to 1.0378. On the downside, deeper fall could still be seen to 61.8% retracement of 0.9818 to 1.0322 at 1.0011 is to be seen before completing the mentioned correction from 1.0322. Nevertheless, downside is still expected to be contained well above 0.9957 resistance turned support and bring rally resumption.

In the bigger picture, after all, USD/CAD is still staying in established range of 0.9709 and 1.0378. The corrective nature of the price actions inside this range argues that it's merely consolidation to the whole rebound from 0.9056. While further choppy sideway trading could still be seen, the rise from 0.9056 is still expected to extend further as long as 0.9709 support holds. Break of 1.0378 will bring rise to 61.8% projection of 0.9056 to 1.0378 from 0.9709 at 1.0526 and above. 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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