USD/CAD’s rally from 1.3549 accelerated higher last week and there is no sign of topping yet. Initial bias stays on the upside this week for 38.2% retracement of 1.4791 to 1.3480 at 1.3981. Decisive break there will carry larger bullish implications and target 61.8% retracement at 1.4290 next. On the downside, below 1.3865 minor support will turn intraday bias neutral first.
Bigger Picture
Price actions from 1.4791 are seen as a corrective pattern to the whole uptrend from 1.2005 (2021 low). Rejection by 38.2% retracement of 1.4791 to 1.3480 at 1.3981 will keep the decline intact, and bring another fall through 1.3480 at a later stage. However, a firm break of 1.3981 will argue that the decline has completed, and set up further rise back to retest 1.4791 instead.
Long-Term Picture
Rising 55-month EMA (now at 1.3588) remains intact. Thus, the uptrend from 0.9056 (2007 low) could still be in progress. However, considering bearish divergence conditions on the monthly MACD, sustained trading below the 55-month EMA will argue that the uptrend has completed with five waves up to 1.4791, and turn the medium-term outlook bearish for a correction to 38.2% retracement of 0.9056 to 1.4791 at 1.2600.
