USD/CAD Elliott Wave
Last week, the USDCAD pair was trading downwards, corrective wave b (coloured blue) of the bigger wave (y) (coloured green) was developing. During Friday's Asian and European sessions, we could observe descending movements from 1.0441 towards the 1.0410 level. Therefore, during the New York session this commodity pair did not manage to hold this level and the price retraced back to 50% of the wave a (coloured blue), where we think wave b (coloured blue) complete three wave cycle. At the moment, the USDCAD pair is trading around 1.0417, and we are expecting to see one more drop lower, before the price turns higher in the c wave (coloured blue). In accordance with our wave rules and taking into account that wave B should retrace 50% of wave A, we can define the potential targets with measuring wave A with take profit at 1.0382 (50% of wave A). To reduce the risk, we can use invalidation point at the 1.0453 level as stop loss.
Support and Resistance
(S3) 1.0362, (S2) 1.0387, (S1) 1.0404, (PP) 1.0429, (R1) 1.0446, (R2) 1.0471, (R3) 1.0488.
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin downward movements. That is why short positions at the level of 1.0410 with stop loss at 1.0453 and take profit at 1.0382 are recommended.
