USD/CAD’s decline from 1.3897 extend to as low as 1.3486 last week and there is no sign of bottoming yet. Initial bias stays on the downside this week for 1.3378 support next, which is close to 61.8% retracement of 1.3091 to 1.3897 at 1.3399. Strong support could be seen there to bring rebound. Meanwhile, on the upside, above 1.3625 minor resistance will turn intraday bias neutral again first.
In the bigger picture, rise from 1.3091 is seen as the fifth leg of the whole rise from 1.2005 (2021 low). Further rally is expected as long as 1.3378 support holds, to 61.8% projection of 1.2401 to 1.3976 from 1.3091 at 1.4064. However, decisive break of 1.3378 will dampen this view and bring deeper fall back to 1.3091 instead.
In the longer term picture, price actions from 1.4689 (2016 high) are seen as a consolidation pattern only, which might have completed at 1.2005. That is, up trend from 0.9506 (2007 low) is expected to resume at a later stage. This will remain the favored case as 55 M EMA (now at 1.3126) holds.
