USD/CAD Weekly Outlook

After initial setback, USD/CAD's rebound from 1.0590 resumed and reached as high as 1.0981 last week. The development affirms the case that USD/CAD has bottomed out at 1.0590. Initial bias remains on the upside this week and further rally should be seen to 1.1101 resistance first. On the downside, below 1.0859 minor support will turn intraday outlook neutral and bring retreat. But downside should be contained well above 1.0659 support and bring rally resumption.

In the bigger picture, fall from 1.3063 is treated as correction to the five wave rally from 0.9056 (07 low). Such decline is possibly completed at 1.0590 on bullish convergence conditions in daily MACD, after missing 61.8% retracement of 0.9056 to 1.3063 at 1.0587. Break of 1.1101 resistance will add much credence to this case and turn focus to 1.1723 resistance for confirmation USD/CAD has bottomed out in medium term. On the downside, while another fall cannot be ruled out for the moment, we'd continue to look for reversal signal as correction from 1.3063 is expected to conclude inside 1.0297/0819 support zone.

In the longer term picture, fall from 1.3063 is treated as correction in the larger up trend only and will likely be contained by mentioned 1.0297/1.0819 support zone, with 61.8% retracement of 0.9056 to 1.3063 at 1.0587 inside. We'd expect at least another medium term rally to above 1.3063 before completing the rise from 0.9056. We'll hold on to this view as long as 1.0297 support holds.

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