USD/CAD rose sharply to as high as 0.9853 last week and the break of 0.9778 resistance indicates that decline from 0.9912 has already finished at 0.9406 already. More important, the development is raising the prospect of medium term reversal. Near term focus will be on 0.9912 resistance. Sustained break there will complete a double bottom reversal pattern (0.9444, 0.9406) and indicate that whole decline from 1.0851 is completed and stronger rise should be seen towards 61.8% retracement of 1.0851 to 0.9406 at 1.0299. On the downside, break of 0.9685 support is needed to indicate short term topping, or we'll stay cautiously bullish in the pair.
In the bigger picture, medium term outlook in USD/CAD remains bearish and the down trend from 2009 high of 1.3063 is in favor to continue lower. Nevertheless, even in that case, we'd again start to look for reversal signal as USD/CAD approaches 0.9056 key support (2007 low). On the upside, however, break of 0.9912 will be a signal that 0.9406 is the medium term bottom already and should turn outlook bullish for a test on 1.0851 key resistance next.
In the longer term picture, firstly, there is no clear indication that the long term down trend from 2002 high of 1.6196 has reversed. Secondly, the medium term fall from 1.3063 is so far looking corrective. Hence, we're slightly favoring the case that price actions from 0.9056 are developing into a long term corrective pattern.