USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.3123; (P) 1.3149; (R1) 1.3185; More…

UD/CAD was rejected by near term falling channel resistance and drops sharply in early US session. Nonetheless, it’s staying above 1.3049 minor support and intraday bias remains neutral. While the view is looking shaky, we’re still favoring that corrective pull back from 1.3385 has completed at 1.2916. Rebound from 1.2961 should extend higher and above 1.3173 will target 1.3289 resistance. However, on the downside, break of 1.3049 minor support will dampen this bullish view and turn focus back to 1.2961 low instead.

In the bigger picture, as long as channel support (now at 1.2958) holds, we’re holding to the bullish view. That is, fall from 1.4689 (2015 high) has completed at 1.2061, ahead of 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Further rally should be seen for 61.8% retracement of 1.4689 to 1.2061 at 1.3685 and above. However, sustained break of the channel support will argue that rise from 1.2061 has completed and will bring deeper fall to 1.2526 support to confirm.