USD/CAD dipped to as low as 1.3222 last week but recovered strongly since then. The is no change in the view that price actions from 1.3534 are forming a consolidation pattern. Therefore, rise from 1.2968 and 1.2460 are not completed yet. Further rally would be seen through 1.3598 after consolidation from 1.3534 is confirmed to be finished.
Strong rebound from 1.3222 and break of 1.3309 suggests that consolidation from 1.3534 is completed. Initial bias is back on the upside this week for 1.3455 resistance first. Break should confirm this case and resume the rise from 1.2968 to 1.3598 next. Break there will confirm resumption of whole rise from 1.2460 to next medium term fibonacci level at 1.3838. On the downside, in case of another fall, we’d expect strong support from 61.8% retracement of 1.2968 to 1.3534 at 1.3184 to contain downside and bring rebound.
In the bigger picture, price actions from 1.4689 medium term top are seen as a correction pattern. The first leg has completed at 1.2460. The second leg from 1.2460 is likely still in progress and could target 61.8% retracement of 1.4689 to 1.2460 at 1.3838. We’d look for reversal signal there to start the third leg. However, break of 1.2968 will argue that the third leg has already started and should at least bring a retest of 1.2460 low. Meanwhile, sustained trading above 1.3838 would pave the way to retest 1.4689 high.
In the longer term picture, rise from 0.9056 (2007 low) is viewed as a long term up trend. It’s taking a breath after hitting 1.4689. But such rise expected to resume later to test 1.6196 down the road.