USD/CAD jumped to as high as 1.0063 last week before forming a temporary top there and retreated. The break of 1.0053 resistance suggests that fall from 1.0522, as well as the correction pattern from 1.0656 has completed at 0.9799 already. Hence, while some more consolidations could be seen initially this week, downside should be contained by 0.9922 minor support and bring another rise. Above will target falling trend line resistance (now at 1.0103) first. Sustained trading above there will confirm this bullish case and target 1.0522/0656 resistance zone next. Though, below 0.9922 will mix up the outlook.

In the bigger picture, current development argues that the consolidation pattern from 1.0656 has completed with three waves down to 0.9799 already, ahead of 0.9725 support as expected. Rise from 0.9406 medium term bottom is possibly resuming. As noted before, price actions from 0.9406 could either be consolidation to fall from 1.3063 or the third leg of the whole consolidation pattern from 2007 low of 0.9056. In either case, another high above 1.0656 is anticipated and USD/CAD should reach 38.2% retracement of 1.3063 to 0.9406 at 1.0803 and above.

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.