Despite dipping to 0.9906 last week, there was no follow through selling in USD/CAD and the pair recovered back into established tight range. Initial bias remains neutral this week for some more sideway trading. Note again that with 1.0050 minor resistance intact, another decline remains in favor. Below 0.9906 will target 0.9891 and then 100% projection of 1.0656 to 0.9891 from 1.0522 at 0.9757. However, above 1.0050 will indicate short term bottoming on bullish convergence condition in 4 hours MACD. In such case, stronger rebound would be seen back to near term channel resistance (now at 1.0118).

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 for the moment. 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.