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Is USD/CAD Bottoming?

USD/CAD has recently been in a bearish correction from the 1.3456 high on the year down to about 1.2833. However, we can see in the 4H chart that the dip has slowed down, and a price bottom could be forming.

USD/CAD 4H Chart 10/21

(click to enlarge)

It is still premature to say that price has bottomed, but it has definitely shifted the pace of decline. Perhaps, the market is more or less neutral at the moment. To me, price action has not set up a bullish outlook just yet, but if I were to front run a possible bullish development, I would look at the 1.2830-1.29 area as one to buy in. 

I would limit my bullish outlook however, one to 1.3050, in case the market is simply sideways. Another small position would stay open up to about 1.33. The most aggressive outlook should be to the 1.3450 area, near the high on the year. This is because the recent run down did neutralize the prevailing uptrend, so we should not have such a strong bullish outlook anymore. A projection to 1.3450 acknowledges some bullish bias (based on the prevailing uptrend seen in the daily chart), but within the context of a consolidation.

USD/CAD Daily Chart 10/21

(click to enlarge)