Despite some volatility last week, USD/CAD stays in range above 1.3730. Initial bias is turned neutral this week first. The rejection at 38.2% retracement of 1.4247 to 1.3730 at 1.3927 suggests that fall from 1.4247 is still in progress. On the downside, break of 1.3730 will target a retest on 1.3480 low. Nevertheless, firm break of 1.3927 will turn bias back to the upside for stronger rebound.
In the bigger picture, the pattern from 1.4791 (2025 high) is still extending, with fall from 1.4247 as the third leg. Firm break of 1.3480 will pave the way to 100% projection of 1.4791 to 1.3480 from 1.4247 at 1.2936. For now, medium term risk will stay on the downside as long as 1.4247 resistance holds, in case of rebound.
In the long term picture, considering bearish divergence condition in M MACD, fall from 1.4791 could be correcting whole up trend from 0.9056 (2007 low). Firm break of 1.3480 support and sustained trading below 55 M EMA (now at 1.3640) will pave the way to 38.2% retracement of 0.9056 to 1.4791 at 1.2600. Nevertheless, strong rebound from 55 M EMA will maintain medium term bullishness.
