The USD/CAD came nicely to the downside last week out of a bearish triangle that was placed in wave B. But then the market made a sharp reversal; We see a strong and interesting rebound away from the 1.40 region, which raises the possibility that a low is in place, especially as price already recovered above the 1.4230 level, where an overlap invalidated any higher-degree bearish impulsive interpretation. That’s a strong indication that a bottom may be forming and that we should be aware of more upside after the current intraday retracement which can be close to a support. So from a minimum perspective, we expect at least one more leg up to around 1.44.
The reason why USDCAD can stay in the uptrend is because of bearish Crude oil, which can keep Canadian dollar weak. If we also consider a bigger corrective recovery for the USdollar Index, then USDCAD can be easily headed higher.
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