USD/CAD remained range-bound above the short-term low near 1.3730 last week. The near-term bias remains neutral. Resistance at 1.3938 is expected to limit further downside, while a break below 1.3730 would resume the decline from 1.4247 and open the door to a test of the 1.3480 low. Conversely, a firm break above 1.3938 would support a stronger rebound toward the 61.8% retracement of the move from 1.4247 to 1.3730, near 1.4050.
In the broader context, the decline from 1.4791, the 2025 high, remains in progress, with the pullback from 1.4247 shaping up as a third leg. A decisive break below 1.3480 would target a 100% projection of the move from 1.4791 to 1.3480, measured from 1.4247, at 1.2936. As long as 1.4247 continues to act as resistance, the medium-term outlook remains bearish.
Over the longer term, a bearish divergence on the monthly MACD suggests that the decline from 1.4791 may be correcting the broad uptrend that began at the 0.9056 low in 2007. A firm break below 1.3480, coupled with sustained trading below the 55-month exponential moving average now at 1.3640, would point to the 38.2% retracement of the 0.9056-to-1.4791 advance at 1.2600. However, a strong rebound from the 55-month EMA would preserve the medium-term bullish structure.
