USD/CAD's decline resumed last week and dipped to as low as 0.9841. The strong break of 0.9891 support confirmed resumption of whole decline from 1.0656. Initial bias is neutral this week for some consolidations. But recovery should be limited below 1.0049 resistance and bring fall resumption. Below 0.9841 will target 100% projection of 1.0656 to 0.9891 from 1.0522 at 0.9757.

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.