USD/CAD Elliott wave
For few days the USDCAD pair has been trading downwards. This movement has a corrective structure and we are counting this drop as corrective wave .4 wave (coloured green) of the bigger wave C (coloured blue). Yesterday, during the Asian and European sessions we could observe an ascending movement from 1.0500 towards the 1.0539 level and we can consider this move as the end of the sub-wave B (coloured black) of .4 wave. Therefore, during the New York session this commodity currency did not manage to hold this levels and the price retraced all the way to 1.0470 level. At the moment, the USDCAD pair is trading around 1.0502 and we are expecting to see one more push higher before the price turns around when developing the C wave ends all 5 sub-waves. In accordance with our wave rules and taking into account that wave 5 should retrace 123.6% of wave 4, we can define the potential targets with measuring wave 4 with take profit at 1.0589 (123.6% of wave 4). To reduce the risk, we can use invalidation point at the 1.0465 level as stop loss.
Support and Resistance
(S3) 1.0382 (S2) 1.0427 (S1) 1.0450 (PP) 1.0495 (R1) 1.0518 (R2) 1.0563 (R3) 1.0586
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin upward movement. That is why long position at the level of 1.0510 with stop loss at 1.0465 and take profit at 1.0589 are recommended.