Daily Pivots: (S1) 1.3137; (P) 1.3187; (R1) 1.3288; More….
USD/CAD’s break of 1.3239 resistance suggests short term bottoming at 1.2994 on bullish convergence condition in daily MACD. Intraday bias is turned back to the upside for 55 day EMA (now at 1.3328). Firm break there will pave the way to 38.2% retracement of 1.4667 to 1.2994 at 1.3633. On the downside, though, below 1.3086 minor support will bring retest of 1.2994 instead.
In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). Sustained break of 61.8% retracement of 1.2061 to 1.4667 at 1.3056 will target a test on 1.2061 (2017 low). But we’d expect loss of downside momentum as it approaches this key support. On the upside, though, break out 1.3715 resistance is needed to confirm completion of the fall. Otherwise, outlook will stay bearish.
