FX.co ★ USD/CAD Wave Analysis for January 02, 2013

USD/CAD Elliott Wave
Since our last analysis the USD/CAD pair was moving in a strong downward move like we expected, corrective V wave (coloured blue) of the bigger (2) wave (coloured green) was developing. During the Monday's Asian and European sessions we could observe ascending movement from 0.9938 toward the 0.9970 level and we can consider this move as the end of the flab B wave (coloured blue). Therefore, during the New York session this commodity pair started pushing lower reaching 0.9907 level. Today in the early Asian session the USD/CAD continued trading in a bearish mood and the price reached 0.9848 level. We can consider this move as the end of the (2) wave (coloured green) and we are expecting to see the price higher today when development of the 3 wave starts. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.0082 (161.8% of wave 1). To reduce the risk, we can use invalidation at 0.9824 level as stop loss.

Support and Resistance
(S3) 0.9848 (S2) 0.9882 (S1) 0.9901 (PP) 0.9935 (R1) 0.9954 (R2) 0.9988 (R3) 1.0007

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 0.9865 with stop loss 0.9824 take profit at 1.0082 are recommended.