USD/CAD’s strong rebound last week suggests that a short term bottom was formed at 1.2588, on bullish convergence condition in 4 hour MACD. Rebound from there is in favor to continue as long as 1.2684 minor support holds. Break of 1.2880 will target 1.2994 support turned resistance. However, break of 1.2684 minor support will argue that the rebound has completed and bring retest of 1.2588 low.
In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). Further decline should be seen back to 1.2061 (2017 low). In any case, break of 1.3389 resistance is needed to indicate medium term bottoming. Otherwise, outlook will remain bearish in case of rebound.
In the longer term picture, we’re viewing price actions from 1.4689 as a consolidation pattern. Thus, up trend from 0.9506 (2007 low) is still expected to resume at a later stay. This will remain the favored case as long as 1.2061 support holds, which is close to 50% retracement of 0.9406 to 1.4689 at 1.2048.
