USD/CAD’s strong rally last week suggests that pull back from 1.3418 has completed at 1.3081. Rebound from 1.2994 is possibly resuming. As a temporary top was formed at 1.3389, initial bias is neutral this week first. On the upside, break of 1.3389 will turn bias back to the upside for 1.3418 and then 100% projection of 1.2994 to 1.3418 from 1.3081 at 1.3505. On the downside, though, break of 1.3225 minor support will mix up the near term outlook again, and turn bias to the downside for 1.3081 support.
In the bigger picture, fall from 1.4667 is seen as the third leg of the corrective pattern from 1.4689 (2016 high). Sustained break of 61.8% retracement of 1.2061 to 1.4667 at 1.3056 will target a test on 1.2061 (2017 low). But we’d expect loss of downside momentum as it approaches this key support. On the upside, firm break of 1.3715 resistance will argue that this falling leg has completed and turn focus back to 1.4667/89 resistance zone.
In the longer term picture, the bullish case of resuming the up trend from 0.9506 (2007 low) is delayed. Consolidation from 1.4689 is extending for another medium term fall. As long as 1.2061 support holds, such up trend should still resume through 1.4689 at a later stage.