USD/CAD Elliott Wave
Since our last analyses the USD/CAD pair has been trading downwards, just like we expected, corrective wave 4 (coloured blue) of the bigger wave [1] (coloured red) has been developing. During the Monday's Asian and European sessions we could observe ascending movement from 1.0467 towards the 1.0554 level and we can consider this move as the end of the impulsive wave 3 (coloured blue). Therefore, during the New York session when development of the corrective wave 4 starts this major currency has retraced back to Asian session lows at 1.0467. At the moment the USD/CAD pair is trading around 1.0470 and we expect to see the price higher when development of the wave 5 (coloured blue) starts. In accordance with our wave rules and taking into account that wave 5 should retrace 61.8% of wave 3, we can define the potential targets with measuring wave 3 with take profit at 1.0666 (61.8% of wave 3). To reduce the risk, we can use support point at 1.0366 level as stop loss.
Support and Resistance
(S3) 1.0374 (S2) 1.0421 (S1) 1.0460 (PP) 1.0507 (R1) 1.0546 (R2) 1.0593 (R3) 1.0632
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upwards movement. That is why long positions at level 1.0500 with stop loss at 1.0366 and take profit at 1.0666 are recommended.
