USD/CAD rose sharply to as high as 1.0734 last week before forming a temporary top there and consolidated. The strong break of medium term falling trend line suggests that a short term bottom is at least formed at 0.9929 on bullish convergence condition in daily MACD. Hence, while some more sideway trading might be seen initially this week, we'd expect downside to be contained by 1.0280 support and bring rally resumption. Above 1.0571 minor resistance will flip intraday bias back to the upside for 1.0734 resistance and then 1.0779 key level.
In the bigger picture, the strong break of medium term falling trend line resistance serves as the first alert that USD/CAD has made a medium term bottom at 0.9929, on bullish convergence condition in weekly MACD. Decisive break of 1.0779 resistance, which will also have sustained trading above 55 weeks EMA (now at 1.0692) will confirm this case and turn outlook bullish. In such case, stronger rally should be seen towards 61.8% retracement of 1.3063 to 0.9929 at 1.1866. However, considering that USD/CAD is still limited below 55 weeks EMA, a break below 1.0280 support will dampen the bullish case and turn focus back to 0.9929 low instead.
In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term sideway pattern. Hence even in case of another fall, we'd expect strong support above 2007 low of 0.9056 to contain down side. On the other hand, another strong medium term rise should be seen after fall fro 1.3063 complete and such rise should target a test on the upper side of the long term range near to 1.3063.