USD/CAD Elliott Wave
Since our last analyses the USD/CAD pair has been trading downwards, corrective waves A and B (coloured blue) of the bigger wave [2] (coloured red) has been developing. Yesterday, during the Asian session we could observe ascending movement from 1.0500 towards the 1.0556 level. Therefore, during the early European session this major currency did not manage to hold this levels and price has dropped to the new daily low at 1.0471 level. We can consider this move as the end of the corrective wave A (coloured blue). At the moment the USD/CAD pair is trading around 1.0540 and we are expecting to see price lower when development of the corrective wave C (coloured blue) starts. In accordance with our wave rules and taking into account that wave 2 should retrace 50% of wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.0355 (50% of wave 1). To reduce the risk, we can use invalidation point at 1.0590 level as stop loss.
Support and resistance
(S3) 1.0387 (S2) 1.0429 (S1) 1.0472 (PP) 1.0514 (R1) 1.0557 (R2) 1.0599 (R3) 1.0642
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downwards movement. That is why short positions at level 1.0500 with stop loss at 1.0590 and take profit at 1.0355 are recommended.
