Daily Pivots: (S1) 1.3187; (P) 1.3240; (R1) 1.3320; More…
USD/CAD’s sharp decline suggests that a temporary top is at least formed at 1.3289. But it’s staying above 1.3063 so far and intraday bias is turned neutral first. On the downside, break of 1.3063 will extend the corrective decline from 1.3385 with another falling leg. USD/CAD should then target channel support (now at 1.2880). For now, we’d expect strong support from there to bring rebound. On the upside, above 1.3289 will bring retest of 1.3385 high instead.
In the bigger picture, as long as channel support (now at 1.2880) holds, we’ll holding to the bullish view. That is, fall from 1.4689 (2015 high) has completed at 1.2061, ahead of 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Further rally should be seen for 61.8% retracement of 1.4689 to 1.2061 at 1.3685 and above. However, sustained break of the channel support will argue that rise from 1.2061 has completed and will bring deeper fall to 1.2526 support to confirm.
