USD/CAD jumped further to as high as 1.0422 last week before forming a temporary top and retreated. Initial bias is neutral this week and some more consolidations could be seen. Though, another rise will remain mildly in favor as long as 1.0262 minor support holds. Above 1.0422 extend the rebound from 1.0051 to 1.0522 resistance next. Break there will argue that the whole consolidation pattern from 1.0656 is over and rebound from 0.9406 is resuming. On the downside, though below 1.0262 will flip bias back to the downside for 1.0051 to extend the consolidation pattern from 1.0656.

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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