USD/CAD Weekly Outlook

USD/CAD rebounded after dipping to 1.3626, but failed to extend gain after hitting 1.3733. Overall, consolidation pattern from 1.3845 is extending. Initial bias remains neutral this week first. While deeper fall could be seen, downside should be contained by 1.3589 cluster support (38.2% retracement of 1.3176 to 1.3845 at 1.3589) to bring rebound. Break of 1.3790 resistance will argue that larger rise is ready to resume and target 1.3845 resistance.

In the bigger picture, price actions from 1.3976 (2022 high) are viewed as a corrective pattern. In case of another fall, strong support should emerge above 1.2947 resistance turned support to bring rebound. Firm break of 1.3976 will confirm up resumption of whole up trend from 1.2005 (2021 low). Next target is 61.8% projection of 1.2401 to 1.3976 from 1.3176 at 1.4149.

In the longer term picture, price actions from 1.4689 (2016 high) are seen as a consolidation pattern, 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 long as 1.2947 resistance turned support holds.

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