USD/CAD's strong rebound last week argues that choppy pull back from 1.0656 is finished at 0.9891, just ahead of 61.8% retracement of 0.9406 to 1.0656 at 0.9884. Rebound from 0.9891 is expected to continue initially this week and further rise could be seen to retest 1.0656 first. On the downside, below 1.0055 minor support will flip bias back to the downside for 0.9891 support instead. Break there should resume the fall from 1.0656 through 0.9725 support.

In the bigger picture, price actions from 0.9406 are viewed as corrective in nature, which would eventually develop into a consolidation pattern. Having said that, firstly, down trend from 1.3063 is expected to resume eventually for another low below 0.9406. Secondly, while rebound from 0.9406 might extend further, upside should be limited by 38.2% retracement of 1.3063 to 0.9406 at 1.0803 to finish the consolidation.

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 strong resistance ahead of the falling 55 months EMA suggests that decline from 1.3063 might still be in progress and a break of 0.9406 will possibly extend the down trend through 0.9056 low.

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