FX.co ★ USD/CAD Wave analysis for January 04, 2013

USD/CAD Elliott Wave
Since our last analysis the USD/CAD pair was trading in an upward move like we expected, impulsive (3) wave (coloured pink) of the bigger 1 wave (coloured blue) was developing. Yesterday during the Asian and European sessions we could observe price trading in a sideways move between 0.9842 and 0.9868 level and we can consider this move as correction in the 2 wave (coloured pink). Therefore, during the late New York session the USD/CAD pair did not manage to hold this level and the price started pushing higher reaching a 0.9883 level. A the moment this commodity pair is trading around 0.9907 level and we are expecting a slight correction before bullish movement continues. In accordance with our wave rules and taking into account that the wave 5 should retrace 161.8% of the wave 1, we can define the potential targets with measuring wave 1 with take profit at 0.9935 (161.8% of wave 1). To reduce the risk, we can use invalidation at 0.9868 level as stop loss.

Support and Resistance
(S3) 0.9810 (S2) 0.9827 (S1) 0.9850 (PP) 0.9867 (R1) 0.9890 (R2) 0.9907 (R3) 0.9930

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 0.9885 with stop loss 0.9868 take profit at 0.9935 are recommended.