USD/CAD Elliott Wave
For the last few days the USDCAD pair has been trading downwards, impulsive wave 3 (coloured blue) of the bigger wave (C) (coloured green) has been developing. Yesterday, during the Asian session we could observe descending movement from 1.03355 towards 1.0302 and we can consider this move as the end of the leading diagonal in sub-wave .1 (coloured green) of 3 wave (coloured blue). Therefore, during the European and early New York session this major currency did not manage to hold this level and price has retraced all the way to 1.0363 level (end of the .2 wave). At the moment, we are seeing price lower and we should be inside 2 wave (coloured black) of extended .3 wave (coloured green), so we are expecting more bearish movements in the next few days.In accordance with our wave rules and taking into account that wave 3 should retrace 200% of wave 1, so we can define the potential targets with measuring wave 1 with take profit at 1.0226 200% of wave 1). To reduce the risk, we can use invalidation point at 1.0340 level as stop loss.
Support and Resistance
(S3) 1.0218 (S2) 1.0258 (S1) 1.0282 (PP) 1.0322 (R1) 1.0346 (R2) 1.0386 (R3) 1.0410
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downwards movement. That is why short position at level 1.0290 with stop loss at 1.0340 and take profit at 1.0226 are recommended.
