USD/CAD Elliott Wave
Last week, the USDCAD pair was trading sideways, impulsive wave .3 (coloured green) of the bigger wave 3 started developing. During the Friday's Asian and European sessions we could observe ascending movement from 1.0292 towards the 1.0359 level and we can consider this move as the end of the wave 2 (coloured black) of .3 wave. Therefore, during the New York session when developing of the wave 3 started this major currency pair retraced back to the 1.0320 level. At the moment, the USDCAD pair is trading around 1.0331 and while the price stays above 1.0359 we are looking for more bearish movements in the 3 wave. In accordance with our wave rules and taking into account that wave 3 should retrace 161.8% of wave 1, so we can define the potential targets with measuring wave 1 with take profit at 1.0251 (161.8% of wave 1). To reduce the risk, we can use invalidation point at the 1.0359 level as stop loss.
Alternation: if the price breaks above 1.0359 we must count the 2 wave (coloured blue) as incomplete wave, and if this happens we should see more bullish movement today, but we would still expect to see more bearish movement in the mid-term outlook.
Support and Resistance
(S3) 1.0233 (S2) 1.0262 (S1) 1.0300 (PP) 1.0329 (R1) 1.0367 (R2) 1.0396 (R3) 1.0434
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin downward movement. That is why short position at the level of 1.0300 with stop loss at 1.0359 and take profit at 1.0251 are recommended.
