USD/CAD rebounded strongly after dipping to 1.0051 last week and the break of 1.0304 resistance suggests that a short term bottom is already formed. The development also argue that price actions from 1.0656 are merely unfolding as triangle consolidation and, that is, rebound from 0.9406 is not over yet. Further rise will remain mildly in favor this week for 1.0533 resistance first. Break there will target 1.0656 and above. However, break of 1.0051 support will revive the case that fall from 1.0522 is still in progress for 0.9891 and below.

In the bigger picture, a medium term bottom is in place at 0.9406 and price actions from there could either be consolidation to fall from 1.3063 or the third leg of the whole consolidation pattern from 2007 low of 0.9056. We're favoring neither case as USD/CAD is holding above 55 week EMA but limited below 55 month EMA. Having said, firstly, we'd expect 0.9406 to hold for a while at least. Secondly, the eventual pattern of the price actions from 1.0656 would decide whether rebound from 0.9406 is going to extend higher, or USD/CAD is just gyrating in range. We'll stay neutral first until the pattern from 1.0656 finishes.

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. Current development dampens the case that fall from 1.3063 is resuming the such down trend. But there is no change in the long term bearish view so far. A break of 0.9056 low is still anticipated after all the consolidative price actions complete.

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