USD/CAD’s recovery from 1.3720 extended higher last week and the breach of 1.3809 suggests that pullback from 1.3878 has completed. Initial bias is mildly on the upside this week for 1.3878 first. Firm break there will resume the whole rebound from 1.3538 towards 1.4014 cluster resistance. On the downside, below 1.3720 will resume the fall fro 1.3878 instead.
In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 cluster resistance holds (38.2% retracement of 1.4791 to 1.3538 at 1.4017). Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.
In the long term picture, as long as 55 M EMA (now at 1.3511) holds, up trend from 0.9056 (2007 low) should still resume through 1.4791 at a later stage. However, sustained trading below 55 M EMA will argue that the up trend has already completed, with rise from 1.2005 to 1.4791 as the fifth wave. 1.4791 would then be seen as a long term top and deeper medium term down trend should then follow.
