FX.co ★ USD/CAD Wave Analysis July 19, 2012

USD/CAD Elliott Wave
For the last few weeks the USD/CAD pair was trading in a downward move developing corrective wave (2) (coloured orange). Yesterday during the Asian and European sessions we could observe an ascending movement towards the 1.0148 level where this major pair found resistance and price started pushing down. Therefore, during the New York session we could observe continuation of the bearish mood and the price reached a new 9 days low at 1.0100 level. At the moment the USD/CAD pair is developing corrective wave C (coloured blue) of the bigger (C) wave (coloured green). In accordance with our wave rules and taking into account that the wave C retraces 100% of the wave A, we can define the potential targets by measuring A wave with Take Profit 1 at 1.0042 (78.6% of wave A) and Take Profit 2 at 0.9986 (100% of wave A). Resistance at 1.0115 point can be used as Stop Loss. Also it is necessary to monitor the CAD Wholesale Sales m/m, U.S. Unemployment Claims, Existing Home Sales, Philly Fed Manufacturing Index data that can change the rate of the pair.
Support and Resistance
(S3) 1.0068 (S2) 1.0086 (S1) 1.0098 (PP) 1.0117 (R1) 1.0135 (R2) 1.0147 (R3) 1.0166
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 1.0085 with Stop Loss 1.0115 Take Profit 1 at 1.0042 and Take Profit 2 at 0.9986 are recommended.