FX.co ★ USD/CAD analysis for May 21, 2013

USD/CAD Elliott Wave
Since our last analyses the USD/CAD pair has been trading downwards, so we need to changed our primary wave count a little bit. During Monday's Asian and European sessions we could observe side-ways movement between 1.0296 and 1.0270 area.Therefore, during the early New York session this major currency did not manage to hold this level and the price has dropped to the new daily low at 1.0215 level. We can consider this move as the end of the corrective wave 4 (coloured green). At the moment the USD/CAD pair is trading around 1.0275 level and we expect to see the price higher in the next few days. In accordance with our wave rules and taking into account that wave 5 should retrace 61.8% of wave 3, we can define the potential targets with measuring wave 3 with take profit at 1.0355 (61.8% of wave 3). To reduce the risk, we can use support point at 1.0210 level as stop loss.
Support and Resistance
(S3) 1.0126 (S2) 1.0171 (S1) 1.0205 (PP) 1.0250 (R1) 1.0284 (R2) 1.0329 (R3) 1.0363
Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upwards movement. That is why long positions at level 1.0290 with stop loss at 1.0210 and take profit at 1.0355 are recommended.