Daily Pivots: (S1) 1.3023; (P) 1.3050; (R1) 1.3092; More….
USD/CAD’s breach of 1.3097 resistance suggests short term bottoming at 1.2928. Intraday bias is turned bias to the upside for strong rebound, towards 55 day EMA (now at 1.3207). Nevertheless, outlook will stay bearish as long as 1.3389 resistance holds. On the downside, break of 1.2928 will resume the larger down trend from 1.4667, to 61.8% projection of 1.4667 to 1.2994 from 1.3389 at 1.2355.
In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). Rejection by 55 week EMA is keeping outlook bearish. 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 1.3389 resistance is needed to indicate medium term bottoming. Otherwise, outlook will remain bearish in case of rebound.
