USD/CAD's choppy decline from 1.0445 continued last week and reached as low as 0.9905. While downside momentum is seen diminishing with mild bullish convergence condition in 4 hours MACD, there is no sign of bottoming yet. Initial bias remains on the downside for 0.9799 support. But note again that as we're treating fall from 1.0445 as a correction, we'd expect strong support above 0.9799 to contain downside and bring strong rebound. Above 0.9969 minor resistance will turn bias neutral first. Further break of 1.0065 support turned resistance will indicate reversal.

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.

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