USD/CAD Weekly Outlook

USD/CAD rebounded after edging lower to 1.3538 last week. Considering bullish convergence condition in D MACD, a short term bottom could be in place. Firm break of 1.3749 support turned resistance will turn bias back to the upside for 1.4014 cluster resistance (38.2% retracement of 1.4791 to 1.3538 at 1.4017), as a corrective move. nevertheless, break of 1.3633 minor support will bring retest of 1.3538 low.

In the bigger picture, price actions from 1.4791 medium term top could either be a correction to rise from 1.2005 (2021 low), or trend reversal. In either case, further decline is expected as long as 1.4014 resistance holds. Next target is 61.8% retracement of 1.2005 (2021 low) to 1.4791 at 1.3069.

In the long term picture, as long as 55 M EMA (now at 1.3494) holds, up trend from 0.9056 (2007 low) should still resume through 1.4791 at a later stage. However, sustained trading below 55 M EMA will argue that the up trend has already completed, with rise from 1.2005 to 1.4791 as the fifth wave. 1.4791 would then be seen as a long term top and deeper medium term down trend should then follow.

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