USD/CAD’s extended steep decline last week suggests that rebound from 1.3641 has completed at 1.3927 already. Initial bias stays on the downside this week for 1.3641 support first. Firm break there will target 1.3538 low. On the upside, above 1.3781 minor resistance will turn intraday bias neutral.
In the bigger picture, price actions from 1.4791 are seen as a corrective pattern to the whole up trend from 1.2005 (2021 low). Deeper fall could be seen as the pattern extends, and break of 1.3538 will target 61.8% retracement of 1.2005 to 1.4791 at 1.3069. For now, medium term outlook will be neutral until there are signs that the correction has completed.
In the long term picture, rising 55 M EMA (now at 1.3576) remains intact. Thus, up trend from 0.9056 (2007 low) should still be in progress. However, considering bearish divergence condition M MACD, sustained trading below 55 M EMA will argue that the up trend has completed with five waves up to 1.4791, and turn medium term outlook bearish for correction to 38.2% retracement of 0.9056 to 1.4791 at 1.2600.
