AUD/CAD consolidated in late 2015 and rallied at the end of the year. The rally came to a stop at the start of 2016, but not after breaking above a key falling trendline as well as the 200-, 100-, and 50-day simple moving averages (SMAs). This rally triggered a bullish reversal signal in the medium-term. However, in the past couple of months, we have been seeing a bearish correction coming down from around 1.0165 to almost 0.97.AUD/CAD Daily Chart 2/12(click to enlarge)Breakout Confirmation? The pullback so far remains within the context of the bullish breakout. Price is still above the 100- and 200-day SMAs. The daily RSI is still above 40 after it crossed 70. This reflects maintenance of the prevailing bullish momentum. Also note that the correction has so far respected the 38.2% fibonacci retracement level as well as the broken trendline as support.Is the market ready to continue the bullish reversal scenario? AUD/CAD 4H Chart 2/12(click to enlarge) The 4H chart shows 1) ABC bearish correction price structure, which could be complete.2) A falling trendline and the cluster of 200-, 100-, and 50-period SMAs as resistance. If price breaks above 0.9950, AUD/CAD would be clear of these resistance factors. But for now, 0.9950 appears to be the critical resistance.3) The RSI has tagged 30, and is still under 60. This means the bearish momentum since the start of the year is still intact. Threshold for Bulls: So, we need to see price break above 0.9950 and the RSI cross 60. This would further confirm the bullish reversal scenario, which would at least put the 1.0165 high in sight, with further upside risk.Bearish Scenario: Now, if the bullish reversal scenario does not materialize above 0.97, we might see further bearish correction towards 0.9580. Here, price would test a rising trendline and the resistance of a previously broken price bottom. This would be like the last line of defense for the bullish reversal scenario. Below 0.9535 (below 61.8% retracement), we should shelve the bullish outlook, and reassess the market.