USD/CAD stayed in consolidation above 1.3180 temporary low last week and outlook is unchanged. Initial bias remains neutral this week first. With 1.3323 minor resistance intact, further decline is expected. On the downside, break of 1.3180 will resume the fall from 1.3664 to 61.8% retracement of 1.2781 to 1.3664 at 1.3118. We’ll start look for bottoming sign below there. On the upside, above 1.3323 will suggest short term bottoming and turn bias back to the upside for stronger rebound.
In the bigger picture, the medium term rise from 1.2061 (2017 low) might continue further. But the structure of such rise is not clearly impulsive so far. Hence, we’d stay cautious on strong resistance from 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685 and 1.3793 resistance to limit upside, and bring medium term topping. But in any case, medium term outlook will stay bullish as long as channel support (now at 1.3036) holds. Sustained break of 1.3793 will pave the way to retest 1.4689 (2015 high).
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.
