USD/CAD Daily Outlook

Daily Pivots: (S1) 1.3047; (P) 1.3075; (R1) 1.3098; More….

USD/CAD’s retreat from 1.31214 extends lower today and reaches 1.3009 so far. Deeper fall could be seen to 4 hour 55 EMA (now at 1.2986). But strong support should be seen above 1.2802 cluster (38.2% retracement of 1.2246 to 1.3124 at 1.2789) to contain downside and bring rally resumption. On the upside, break of 1.3124 will extend recent rally to 161.8% projection of 1.2061 to 1.2916 from 1.2246 at 1.3629 next.

In the bigger picture, we’re favoring the medium term bullish case. That is larger down trend from 1.4689 has completed at 1.2061 as a correction, drawing support from 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Sustained break of 38.2% retracement of 1.4689 to 1.2061 at 1.3065 will pave the way to 61.8% retracement at 1.3685. This will be the preferred case now as long as 1.2802 support holds.

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