FX.co ★ USD/CAD Wave Analysis for January 03, 2013

USD/CAD Elliott Wave
For the last few days the USD/CAD pair was trading in a downward movement, corrective C wave (coloured blue) of the bigger (2) wave (coloured green) was developing. Yesterday, during the Asian and European sessions we could observe descending movement from 0.9975 toward the 0.9863 level and we can consider this move as the end of the (2) wave (coloured green). Therefore, during the New York session when development of the (3) wave began the USD/CAD pair started pushing higher reaching a 0.9871 level and we can consider this move as the end of the (1) wave (coloured pink). At the moment this commodity pair is trading around 0.9850 and we are expecting to see the price above 0.9900 level today. 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 0.9899 (161.8% of wave 1). To reduce the risk, we can use invalidation at 0.9836 level as stop loss.

Support and Resistance
(S3) 0.9769 (S2) 0.9810 (S1) 0.9835 (PP) 0.9876 (R1) 0.9917 (R2) 0.9942 (R3) 0.9983

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 0.9855 with stop loss 0.9836 take profit at 0.9899 are recommended.