USD/CAD Elliott Wave
Last week, the USD/CAD pair was trading slightly downwards, corrective wave .iv (coloured black) of the bigger wave c (coloured blue) was developing. During the Friday's Asian session, we could observe ascending movements from 1.0460 towards the 1.0483 level and we can consider this move as the end of the second swing of the .iv wave (coloured black). Therefore, during the European and New York sessions, this commdity pair did not manage to hold around the highs and the price dropped to the 1.0434 level. At the moment, the USDCAD pair is trading around the 1.0429 level, and we are expecting to see push higher in the next session for the end of the Ending Diagonal C wave. In accordance with our wave rules and taking into account that wave C should retrace 100% of wave A, we can define the potential targets with measuring wave A with take profit at 1.0546 (100% of wave A). To reduce the risk, we can use invalidation point at 1.0404 level as stop loss.
Alternate view: wave (y) is already over at 1.0525 and we are seeing A-B-C pullback now, if this is a case we should see bigger correction from current levels towards the 1.0100 level, but this count take a place only if price manage to break below the 1.0404 level.
Support and Resistance
(S3) 1.0374, (S2) 1.0406, (S1) 1.0421, (PP) 1.0453, (R1) 1.0468, (R2) 1.0500, (R3) 1.0515.
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin upward movements. That is why long positions at the level of 1.0450 with stop loss at 1.0404 and take profit at 1.0546 are recommended.
