USD/CAD drew support from 1.3720/5 zone again and rebounded last week but lost momentum again after hitting 1.3824. Initial bias remains neutral this week first. On the upside, break of 1.3889 resistance will suggest that the corrective rebound from 1.3538 is resuming, and further rise should be seen through 1.3923 high towards 1.4014 cluster resistance. However, decisive break of 1.3725 will indicate that the corrective rebound has completed, and turn near term outlook bearish.
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 (38.2% retracement of 1.4791 to 1.3538 at 1.4017) holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 (2025 high) at 1.3069.
In the long term picture, considering bearish divergence condition in M MACD, up trend from 0.9506 (2027 low) might have completed with five waves up to 1.4791. Sustained trading below 55 M EMA (now at 1.3520) will solidify this case and bring deeper medium term fall to 38.2% retracement of 0.9056 to 1.4791 at 1.2600, even as a correction. Nevertheless, strong rebound from the 55 E MEA will retain bullishness for up trend resumption through 1.4791 later.
