Canadian Dollar Technical Outlook

The entire rally from 1.0782 has now been retraced. Additional weakness is expected over the next several weeks in order to complete the decline from 1.1730 and by extension the entire decline from 1.3068. 1.0588 is the next level of potential support (Fibonacci). Near term, the USDCAD may stage a rally back to 1.1115 as short term momentum indicators are divergent with the latest lows. Structurally, the rally would be considered a B wave within the second A-B-C pattern since the top at 1.3068.