Daily Pivots: (S1) 1.3316; (P) 1.3338; (R1) 1.3376; More

USD/CAD’s break of 1.3340 resistance completes a head and shoulder bottom pattern (ls: 1.3180, h: 1.3068, rs: 1.3112). And the pull back from 1.3664 should have completed at 1.3068. Intraday bias stays on the upside for retesting 1.3664 and then 1.3685 fibonacci level. On the downside, break of 1.3273 minor support will dampen this view and turn bias back to the downside for 1.3112 support instead.

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In the bigger picture, structure of the medium term rise from 1.2061 (2017 low) to 1.3664 is not clearly impulsive. 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 1.3118) holds. Sustained break of 1.3793 will pave the way to retest 1.4689 (2015 high). Firm break of the channel support should confirm reversal target 1.2061 low again.

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