USD/CAD dived to 0.9815 last week but lacked follow through selling and recovered. The pair continued to lose downside momentum. Initial bias is neutral this week and some consolidations would be seen above 0.9815 temporary lot. Another fall remains in favor and below 0.9815 will target support zone of 61.8% projection of 1.0671 to 0.9979 from 1.0207 at 0.9779 and 0.9709. Though, we'd expect USD/CAD to lose more downside momentum and reverse from there. On the upside, break of 0.9986 will now confirm short term bottoming and bring stronger rebound.
In the bigger picture, whole medium term fall from 1.0363 (2009 high) is still in progress and such down trend should continue to 0.9709 support first and possibly further towards 2007 low of 0.9056. Nevertheless, fall from 1.3063 is still looking corrective and hence, we'd expect strong support between 0.9056/9709 to contain downside and bring another medium term rise. Though, break of 1.0851 resistance is needed to indicate medium term reversal. Otherwise, outlook will remain bearish.
In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term corrective pattern.