USD/CAD edged higher to 1.0265 but lacked follow through buying and retreated back to establish range. Momentum of the rebound from 0.9891 is not too convincing, with bearish divergence condition in 4 hours MACD. But after all, further rise will remain in favor as long as 1.0055 minor support holds. Above 1.0265 should extend the current rise to 61.8% retracement of 1.0656 to 0.9891 at 1.0364 and above. However, break of 1.0055 will argue that choppy recovery from 0.9891 is already finished and will turn bias back to the downside for retesting this support.

In the bigger picture, price actions from 0.9406 are viewed as corrective in nature, which would eventually develop into a consolidation pattern. The first leg should have completed at 1.0656. The second leg form 1.0656 might spiral down towards 0.9406 or gyrate sideway between 0.9725 and 1.0656. But after all, firstly, down trend from 1.3063 is expected to resume eventually for another low below 0.9406. Secondly, while another strong rally might be seen as the consolidation extends, 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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