USD/CAD Daily Outlook

Daily Pivots: (S1) 0.9794; (P) 0.9847; (R1) 0.9879;

USD/CAD drops to as low as 0.9810 so far today, breaking 0.9815 support to resume recent decline. Further fall should be seen towards 61.8% projection of 1.0671 to 0.9979 from 1.0207 at 0.9779. However, note that USD/CAD has been clearly losing downside momentum recently, with bullish convergence condition in 4 hours and daily MACD. Strong support could be seen between 0.9709 and 0.9779 to contain downside initially and bring rebound. But after all, break of 0.9957 is needed to confirm bottoming. Otherwise, outlook will remain bearish.

In the bigger picture, whole medium term fall from 1.0363 (2009 high) is still in progress and such down trend should continue to 0.9709 support first and possibly further towards 2007 low of 0.9056. Nevertheless, fall from 1.3063 is still looking corrective and hence, we'd expect strong support between 0.9056/9709 to contain downside and bring another medium term rise. Though, break of 1.0851 resistance is needed to indicate medium term reversal. Otherwise, outlook will remain bearish.