USD/CAD’s rally from 1.3091 continued last week despite some interim retreat. Initial bias is now on the upside this week for 1.3653 resistance. Decisive break there will confirm that correction from 1.3976 has completed, a target a test on this high. On the downside, however, break of 1.3509 support will indicate short term topping, and turn bias to the downside for some correction first.
In the bigger picture, price actions from 1.3976 are viewed as a corrective pattern only. Upon completion, rise from 1.2005 (2021 low) would resume through 1.3976. Next target is 61.8% projection of 1.2005 to 1.3976 from 1.3091 at 1.4309. For now, this will remain the favored case as long as 55 D EMA (now at 1.3387) holds.
In the longer term picture, price actions from 1.4689 (2016 high) are seen as a consolidation pattern only, which might have completed at 1.2005. That is, up trend from 0.9506 (2007 low) is expected to resume at a later stage. This will remain the favored case as 55 M EMA (now at 1.3044) holds.
