USD/CAD's recovery continued last week and is held well above 0.9731 minor support so far. Further rally could be seen to above 0.9859. But at this point, we'd still expect upside to be we'd expect strong resistance at 0.9948 (38.2% retracement of 1.0455 to 0.9633 at 0.9943) to limit upside and bring fall resumption eventually. Below 0.9731 will flip bias back to the downside for a test on 0.9633 low first.

In the bigger picture, so far, price actions from 1.0656 are corrective looking even though fall from 1.0445 was deeper than expected. At this point, we'd still favor any downside attempt to be contained above 0.9406 low and bring another rebound to 38.2% retracement of 1.3063 to 0.9406 at 1.0803. Nonetheless, we'd not too confident on this view and will pay attention to whether current decline would accelerate or decelerate to confirm.

In the longer term picture, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. and 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 from 0.9406 complete.



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