FX.co ★ USD/CAD Wave Analysis for October 09, 2012

USD/CAD Elliott Wave
Yesterday the USD/CAD pair was trading in a downward move, developing corrective wave (b) (coloured green) of the bigger wave (2) (coloured orange). During the Asian and European sessions, we could observe an ascending movement from 0.9770 towards the 0.9800 level and we can consider this move as the end of the flat wave (a) (coloured green). Therefore, during the New York session, the USD/CAD pair did not manage to hold this level and the price started puching lower when development of the (b) wave began. Today during the early New York session, this major pair reached a new daily low at 0.9745 level and we can consider this move as the end of the (b) wave (coloured green). For today we are expecting to see the upward move to 0.9810 level where we expect to see the end of the final (c) wave. In accordance with our wave rules and taking into account that the wave C should retrace 161.8% of the wave A, we can define the potential targets with measuring wave A, with Take Profit at 0.9810 (100% of wave A) and Take Profit 2 at 0.9850 (161.8% of wave A) . To reduce the risk, we can use invalidation at 0.9746 level as Stop Loss. Also it is necessary to monitor CAD Housing Starts and U.S. IBD/TIPP Economic Optimism data that can change the rate of the pair.
Support and Resistance
(S3) 0.9724 (S2) 0.9743 (S1) 0.9755 (PP) 0.9773 (R1) 0.9792 (R2) 0.9804 (R3) 0.9822
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 0.9750 with Stop Loss 0.9746, Take Profit at 0.9810 and Take Profit 2 at 0.9850 are recommended.