USD/CAD’s rise from 1.2781 extended to 1.3318 last week even though upside momentum remained rather unconvincing. As a temporary too is in place, initial bias is neutral first. Outlook stays bearish as long as 1.3141 support holds. On the upside, break of 1.3318 will extend the rally to 1.3385 key resistance next. On the downside, break of 1.3141 will indicate short term topping and turn bias to the downside for 1.3056 support first.
In the bigger picture, current development revives the case that corrective fall from 1.3385 has completed at 1.2781 already. And whole up trend from 1.2061 (2016 low) is ready to resume. Break of 1.3385 will target 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685. This will now be the favored case as long as 1.2781 support holds.
In the longer term picture, corrective fall from 1.4689 (2015 high) should have completed with three waves down to 1.2061, just ahead of 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. The development keeps long term up trend from 0.9406 and that from 0.9056 (2007 low) intact. For now, there is prospect of extending the long term up trend to 61.8% projection of 0.9406 to 1.4689 from 1.2061 at 1.5326 in medium to long term.
