USD/CAD initially dived to 1.3886 last week but rebounded strongly from there. Strong support was seen from 55 D EMA (now at 1.3914). The pair is also staying well inside near term rising channel. Overall development suggests that rise from 1.3538 is still in progress. Initial bias stays on the upside for 1.4078 this week. Break there will target 61.8% projection of 1.3725 to 1.4078 from 1.3886 at 1.4104, and then 100% projection at 1.4239. For now, risk will remain on the upside as long as 1.3887 support holds, in case of retreat.
In the bigger picture, price actions from 1.4791 medium term top is likely just unfolding as a correction to up trend from 1.2005 (2021 low). Based on current momentum, rise from 1.3538 is the second leg, and a third leg should follow before up trend resumption. That is, range trading is set to extend for the medium term. For now, this will remain the favored case as long as 1.3725 support holds. However, firm break of 1.3725 will revive the case that fall from 1.4791 is indeed a larger scale correction.
In the long term picture, 55 M EMA (now at 1.3525) remains intact. Thus, up trend from 0.90567 (2007 low) should still be in progress. However, considering bearish divergence condition M MACD, sustained trading below 55 M EMA will argue that the up trend has completed with five waves up to 1.4791, and turn medium term outlook bearish for correction.
. The pair is also staying well inside near term rising channel. Overall development suggests that rise from 1.3538 is still in progress. Initial bias stays on the upside for 1.4078 this week. Break there will target 61.8% projection of 1.3725 to 1.4078 from 1.3886 at 1.4104, and then 100% projection at 1.4239. For now, risk will remain on the upside as long as 1.3887 support holds, in case of retreat.){kind=link}