FX.co ★ USD/CAD analysis for September 04, 2013

USD/CAD Elliott Wave
Since our last analysis the USDCAD pair has been trading downwards, just like we expected, impulsive wave 1 (coloured black) of the bigger wave .1 (coloured green) has been developing. Yesterday, during the Asian and European sessions we could observe descending movement from 1.0558 towards the 1.0508 level and we can consider this move as the end of the wave 1 (coloured black). Therefore, during the early New York session this commodity currency did not manage to hold this levels and the price retraced back to the 1.0546 level (the end of wave 2). At the moment, the USDCAD pair has been trading around the 1.0525 level and we are expecting to see continuation of the bearish movement today. In accordance with our wave rules and taking into account that wave 3 should retrace 161.8% of wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.0467 (161.8% of wave 1). To reduce the risk, we can use invalidation point at the1.0545 level as stop loss.

Support and Resistance
(S3) 1.0457 (S2) 1.0482 (S1) 1.0508 (PP) 1.0533 (R1) 1.0559 (R2) 1.0584 (R3) 1.0610

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin downward movement. That is why short positions at the level of 1.0520 with stop loss at 1.0545 and take profit at 1.0467 are recommended.