Last week's strong rally in USD/CAD confirmed that consolidation pattern from 1.0656 is finished with three waves down to 0.9799. Near term outlook will now stay bullish as long as 1.0063 support holds, even in case of retreat. Current rally from 0.9799 is expected to extend to 1.0522/0656 resistance zone next.

In the bigger picture, current development indicates that rebound from 0.9406 is resuming. Such rise is either a correction to fall from 1.3063 or the third leg of the whole consolidation pattern from 2007 low of 0.9056. In either case, USD/CAD should target 38.2% retracement of 1.3063 to 0.9406 at 1.0803 first and possibly further to 100% projection of 0.9406 to 1.0656 from 0.9799 at 1.1049 before completion. Break of 0.9799 support is needed to invalidate this view or we'll stay bullish even in case of deep pull back.

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.