USD/CAD Weekly Outlook

USD/CAD Weekly Outlook

USD/CAD's correction from 1.0341 extended lower last week and reached 1.0144 before recovering mildly. Near term outlook stays mildly bearish as long as 1.0284 minor resistance holds. Fall from 1.0341 could continue to 55 days EMA (now at 1.0135) and below. On the upside, above 1.0284 minor resistance will indicate that such correction is completed and will flip bias back to the upside for 1.0341 and above.

In the bigger picture, price actions from 1.0656 are viewed as a correction pattern, no change in this view. Current development affirmed the case that such correction has completed at 0.9633 already and medium term rally from 0.9406 is resuming. Focus is back to 1.0445 resistance and decisive break there will confirm our bullish view and target 38.2% retracement of 1.3063 to 0.9406 at 1.0803. In any case, we'll stay cautiously bullish as long as 1.0099 support holds.

In the longer term picture, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. and there is no change in the long term bearish view so far. A break of 0.9056 low is still anticipated after all the consolidative price actions from 0.9406 complete.