USD/CAD jumped sharply to as high as 1.0361 last week as the whole rebound form 0.9406 resumed. With 1.0126 minor support intact, initial bias remains on the upside this week and further rally could be seen towards 161.8% projection of 0.9406 to 1.0009 from 0.9725 at 1.0701 next. On the downside, below 1.0216 minor support will turn bias neutral and bring consolidations. But retreat should be contained well above 1.0026 resistance turned support and bring another rally.
In the bigger picture, sustained trading above 55 weeks EMA affirms the case that whole down trend from 2009 high of 1.3063 has finished at 0.9406 on bullish convergence condition in weekly. Current rally from 0.9406 should now target 1.0851 resistance (38.2% retracement of 1.3063 to 0.9406 at 1.0803). Break there will extend the rebound to 61.8% retracement 1.1666. On the downside, break of 0.9725 support is needed to confirm completion of the rise from 0.9406. Or, we'll stay bullish in the pair.
In the longer term picture, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed even though bullish convergence condition was seen in monthly MACD. The fall from 1.3063 to 0.9406 looks corrective and could either be part of a sideway pattern from 0.9056, or a corrective to rise from there. The long term outlook, i.e., the possibility of taking out 1.3063 high, will depend on whether rise from 0.9406 would eventually develop into a strong impulsive wave. We'll wait and see.