USD/CAD Elliott Wave
Last week the USD/CAD pair has been trading sideways, impulsive wave (3) (coloured blue) of the bigger wave C (coloured red) has started its development. During the Friday's European session we could observe descending movement from 1.0250 towards 1.0230 level and we can consider this move as the end of the sub-wave 1 of the bigger (3) wave (coloured blue). Therefore, during the New York session this major currency did not manage to hold this level and the price has retraced back to 1.0269 level. At the moment the USD/CAD pair is trading around 1.0258 and we expect to see the price trading bearish until wave (3) do not finish all 5 sub-waves. In accordance with our wave rules and taking into account that wave 3 should retrace 161.8% of the wave 1, we can define the potential targets with measuring wave A with take profit at 1.0163 (161.8% of wave 1). To reduce the risk, we can use invalidation point at 1.0280 as stop loss.
Support and Resistance
(S3) 1.0204 (S2) 1.0217 (S1) 1.0242 (PP) 1.0255 (R1) 1.0280 (R2) 1.0293 (R3) 1.0318
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downwards movement. That is why short positions at level 1.0240 with stop loss at 1.0280 and take profit at 1.0163 are recommended.
