USD/CAD rebounded after hitting 1.0159 last week but then pared much gain towards the end. Initial bias is neutral first and we'll wait and see the developments. On the upside, above 1.0300 minor resistance will reaffirm the case that correction from 1.0445 has already finished at 1.0159. Intraday bias will then be flipped back to the upside for 1.0445. Break will resume rally from 0.9799 to 1.0522/1.0656 resistance zone. However, below 1.0159 will extend the mentioned correction to 61.8% retracement of 0.9799 to 1.0445 at 1.0046 before completion.
In the bigger picture, correction from 1.0656 is finished with three waves down to 0.9799 and rise from there is resuming the medium term rebound from 0.9406. Such rise from 0.9406 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.