USD/CAD failed to clear 1.4115 resistance after recovering from last week’s dip to 1.4002, leaving the initial weekly bias neutral. A firm break higher would open a retest of 1.4247, while the 55-month EMA at 1.3631 now marks the line between a continued uptrend and a deeper correction.
USD/CAD recovered from a dip to 1.4002 but failed to break 1.4115 minor resistance, keeping the initial weekly bias neutral for now.
Near-term levels to watch
A firm break of 1.4115 would signal that the corrective pullback from 1.4247 has completed, bringing a stronger rally to retest that high. If the pair falls instead, 1.3965 cluster support should contain the downside — an area reinforced by the 38.2% retracement of the 1.3480 to 1.4247 move at 1.3954.
The bigger picture points higher
The fall from 1.4791 appears to have completed as a three-wave correction to 1.3480. It remains early to judge whether the rise from there is a corrective bounce or a resumption of the larger uptrend from the 1.2005 low of 2021. Either way, a retest of the 1.4791 high should be seen next.
The monthly EMA holds the trend
On the long-term chart, the rising 55-month EMA sits at 1.3631 and remains intact, so the uptrend from the 0.9056 low of 2007 could still be in progress. Bearish divergence on the monthly MACD is the warning sign: sustained trading below the 55-month EMA would argue the advance has completed with five waves up to 1.4791. That would turn the medium-term outlook bearish, pointing to a correction toward 1.2600, the 38.2% retracement of 0.9056 to 1.4791.
Source: ActionForex
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