Daily Pivots: (S1) 1.2868; (P) 1.2906; (R1) 1.2949; More….
USD/CAD’s sharp decline today now puts 38.2% retracement of 1.2246 to 1.3124 at 1.2789 into focus. Sustained break there should confirm near term reversal, on head and shoulder top pattern (ls: 1.3000; h: 1.3124; rs: 1.2942). That will also indicate rejection by 1.3065 fibonacci level. Deeper fall would than be seen back to 1.2246 support next. On the upside, though, break of 1.2942 will indicate support from 1.2789 and turn bias back to the upside for 1.3124.
In the bigger picture, outlooks is turned a bit mixed again. Strong support was seen from 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. But there was no follow through buying above 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Rejection by 1.3065 will argue that price action from 1.2061 is merely a three wave corrective pattern. And 1.2061 will be put back into focus with medium term bearishness revived.
