FX.co ★ USD/CAD Wave analysis for January 07, 2013

USD/CAD Elliott Wave
Since our last analysis the USD/CAD pair has traded downwards, corrective wave 2 (coloured blue) of the bigger wave (3) (coloured green) has developed. During the European session we could observe strong ascending movement towards the 0.9922 level and we can consider this move as the end of the wave 1 (coloured blue). Therefore, during the early New York session the USD/CAD pair did not manage to hold this level, and price started pushing lower reaching a new daily low at 0.9847 level. We can consider this move as the end of the corrective wave 2 (coloured blue). At the moment this commodity pair is trading around 0.9872 level and we expect the price to get higher 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 0.9988 (161.8% of wave 1). To reduce the risk, we can use invalidation at 0.9851 level as stop loss.

Support and Resistance
(S3) 0.9806 (S2) 0.9835 (S1) 0.9853 (PP) 0.9881 (R1) 0.9910 (R2) 0.9928 (R3) 0.9956

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 0.9900 with stop loss at 0.9851 and take profit at 0.9988 are recommended.