USD/CAD dropped further to 1.2466 last week but formed a short term bottom there and rebounded. Further rise could be seen this week. But overall outlook will remain bearish as long as 1.2880 resistance holds. Below 1.2586 will turn bias to the downside and bring retest of 1.2466 low first. However, sustained break of 1.2880 will argue that fall from 1.3389 has completed and bring stronger rise to 1.2994 support turned resistance.
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 1.2994 support turned resistance resistance is needed to indicate medium term bottoming. Otherwise, outlook will remain bearish in case of strong 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.