USD/CAD Weekly Forecast

After consolidating for most of the week, USD/CAD surged to as high as 1.2759 on Friday. The development suggests that triangle consolidation from 1.3015 might have finally completed. Short term outlook will remain bullish initially this week with focus on 1.2765 resistance. Break will affirm this bullish scenario and bring stronger rise to retest 1.3005/15 resistance zone. Break will confirm medium term up trend resumption. On the downside, though, below 1.2392 support will flip bias back to the downside and argue that triangle consolidation is still in progress for another fall before completion.

In the bigger picture, as discussed before, price actions from 1.3015 is treated as fourth wave consolidation, in form of triangle pattern, in the medium term up trend from 0.9056 (1.0378, 0.9823, 1.3015, ......). Break of 1.2765 will be the first signal that such consolidation has completed. Further decisive break of 1.3005/15 will confirm medium term up trend resumption and should then target 61.8% retracement of 1.6196 to 0.9056 at 1.3469. On the downside, below 1.1761 support will invalidate this case and suggests that deeper fall would be seen to retest 1.1464 before completing the consolidation.

In the longer term picture, sustained trading above of 55 months EMA affirms that case that a long term bottom is already formed at 0.9056 with bullish convergence condition in monthly MACD. At this moment, it's too early to conclude how far this up trend will eventually extend to. Nevertheless, note that the impulsive nature of the rise from 0.9056 indicates that the price actions after the rise from 0.9056 completes a five wave sequence will be corrective in nature, and be followed at least another medium term up trend before completing the long term rise.

Based on ActionForex.com Technical Outlook