Daily Pivots: (S1) 1.3124; (P) 1.3144; (R1) 1.3170; More….
USD/CAD’s strong rebound and break of 1.3242 resistance suggests that fall from 1.3418 has completed at 1.3099. Corrective rebound from 1.2994 is likely extending with another rising leg. Intraday bias is turned back to the upside for 1.3418 first. Break will target 38.2% retracement of 1.4667 to 1.2994 at 1.3633. On the downside, break of 1.3099 will bring retest of 1.2994 low 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, firm break of 1.3715 resistance will argue that this falling leg has completed and turn focus back to 1.4667/89 resistance zone.
