USD/CAD dropped to as low as 0.9683 last week then turned sideway. Initial bias remains neutral this week and some more consolidations would be seen above 0.9683. But after all, upside is expected to be limited by 0.9836 support turned resistance and bring fall resumption. Below 0.9683 will target 161.8% projection of 1.0851 to 1.0138 from 1.0671 at 0.9517 next. Nevertheless, above 0.9836 will dampen this view and bring stronger rebound back to parity instead.

In the bigger picture, whole medium term fall from 1.3063 (2009 high) is still in progress and such down trend could possibly extend 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 confirm medium term reversal. Otherwise, medium term 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.

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