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USD/CAD Weekly Outlook – Action Forex

USD/CAD”s deeper decline from 1.3897 last week indicates short term topping. Initial bias remains on the downside this week for 38.2% retracement of 1.3091 to 1.3897 at 1.3589. Strong support should be seen there to bring rebound. On the upside, above 1.3759 minor resistance will bring retest of 1.3897. However, sustained break of 1.3589 will bring deeper fall to 61.8% retracement at 1.3399.

In the bigger picture, corrective pattern from 1.3976 (2022 high) should have completed with three waves down to 1.3091. Decisive break of 1.3976 high will confirm resumption of up trend from 1.2005 (2021 low). This will now remain the favored case as long as 1.3378 support holds. However, firm break of 1.3378 will argue that the pattern from 1.3976 is indeed still extending.

In the longer term picture, price actions from 1.4689 (2016 high) are seen as a consolidation pattern only, which might have completed at 1.2005. That is, up trend from 0.9506 (2007 low) is expected to resume at a later stage. This will remain the favored case as 55 M EMA (now at 1.3100) holds.

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