USD/CAD fell sharply to as low as 1.0286 last week and the break of 1.0332 support indicates that fall from 1.0851 has resumed. Initial bias remains on the downside this week and further fall should be seen to 1.0109 support first. Break there will confirm that whole rebound from 0.9929 is completed and will bring another low below 0.9929. On the upside, , above 1.0453 minor resistance will turn intraday bias neutral. But break of 1.0678 resistance is needed to indicate that fall from 1.0851 is completed. Otherwise, outlook will remain slightly bearish.
In the bigger picture, the deeper than expected fall from 1.0851 dampened the view that USD/CAD has bottomed out in medium term at 0.9929. Nevertheless, considering bullish convergence conditions in daily and weekly MACD, we believe that medium term decline from 1.3063 is going to reverse soon, probably after a brief break of 0.9929 low. Hence, focus will be on reversal signal on next fall. On the upside, break of 1.0851 resistance will, on the other hand, revive that case that USD/CAD has already bottomed out and will bring stronger rise to 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.
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.