Despite edging higher to 1.0851, USD/CAD reversed as dropped sharply to as low as 1.0443 last week. A short term top is in place at 1.0851 with bearish divergence condition in 4 hours MACD. More correction could still be seen as long as 1.0643 minor resistance holds, towards 61.8% retracement of 1.0109 to 1.0851 at 1.0392 and below. But strong support should be seen above trend line support (now at 1.0239) and bring rebound. On the upside, above 1.0643 will indicate that pull back fro 1.0851 is over and bring flip intraday bias back to the upside for retesting this high first.
In the bigger picture, last week's break of 1.0779 resistance confirms that a medium term bottom is formed at 0.9929 already, with bullish convergence condition in weekly MACD. We'd stay bullish in USD/CAD and expect the rebound from 0.9929 to target 38.2% retracement of 1.3063 to 0.9929 at 1.1126 first, with prospect of extending further to 61.8% retracement at 1.1866 and above. On the downside, break of 1.0109 support is needed to invalidate this view. Otherwise, we'll stay bullish.
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. The second leg of such pattern should have completed at 0.9929 and third leg should have just started towards 1.3063 high.