Daily Pivots: (S1) 1.2868; (P) 1.2906; (R1) 1.2949; More….
USD/CAD is staying in consolidation above 1.2814 and intraday bias remains neutral first. For the moment, we’d still expect strong support from 1.2802 cluster support zone (38.2% retracement of 1.2246 to 1.3124 at 1.2789) to contain downside and bring rebound. Break of 1.3214 will extend larger rise from 1.2061 to 161.8% projection of 1.2061 to 1.2916 from 1.2246 at 1.3629. However, on the downside, firm break of 1.2789/2802 will raise the chance of rejection by 1.3065 medium term fibonacci level. In that case, intraday bias will be turned back to the downside for 1.2246 support instead.
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. However, rejection by 1.3065 will argue that price action from 1.2061 is merely a three wave corrective pattern. And 1.2061 will be put back into focus with medium term bearishness revived.
