USD/CAD’s strong extended rally last week suggests that it’s already revering the down trend from 1.4791. Initial bias remains on the upside this week for 61.8% retracement of 1.4791 to 1.3480 at 1.4290. On the downside, below 1.4092 minor support will turn intraday bias neutral and bring consolidations first, before staging another rally.
In the bigger picture, current development suggests that fall from 1.4791 has completed as a three wave correction to 1.3480. It’s still early to judge if rise from there a corrective bounce, or resumption of the larger up trend from 1.2005 (2021 low). But in either case, retest of 1.4791 high should be seen next.
In the long term picture, rising 55 M EMA (now at 1.3588) remains intact. Thus, up trend from 0.9056 (2007 low) could 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 to 38.2% retracement of 0.9056 to 1.4791 at 1.2600.
