USD/CAD Elliott Wave
Since our last analysis the USDCAD pair has been trading upwards in a corrective structure, corrective wave .2 (coloured green) of the bigger wave 1 (coloured blue) has been developing. Yesterday, during the European session we could observe descending movement from 1.0505 towards the 1.0475 level and we can consider this move as the end of the B wave (coloured black) of the wave .2 (coloured green). Therefore, during the New York session this currency did not manage to hold this level and th price retraced back to the 1.0515 level (the end of wave .2). At the moment, the USDCAD pair has been trading around 1.0480 and we are expecting to see continuation of the bearish move in the next few sessions. In accordance with our wave rules and taking into account that wave 3 should retrace 161.8% of wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.0372 (161.8% of wave 1). To reduce the risk, we can use invalidation point at 1.0516 as stop loss.
Support and Resistance
(S3) 1.0440 (S2) 1.0458 (S1) 1.0480 (PP) 1.0498 (R1) 1.0520 (R2) 1.0538 (R3) 1.0560
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin downward movement. That is why short positions at 1.0470 with stop loss at 1.0516 and take profit at 1.0372 are recommended.
