FX.co ★ USD/CAD H1 analysis for September 5, 2013

General overview for 05/09/2013 10:30 CET

The level of 1.0470 was almost hit (low so far was 1.0473) and price action is confirming a larger time frame cycle of wave 4 correction in shape of ABC or Triangle pattern.

Two possible scenarios now are:

In ABCDE scenario of Triangle wave 4 the intraday supply area of grey rectangle at 1.0551 - 1.0558 should hold. If it is broken then the low of the wave C is the end of wave 4 correction.

In ABC Irregular Flat scenario wave C should go much lower to complete this correction. If 1.0470 is broken, then 1.0435 is the next support. The decline must be in five waves impulsive wave progression. It is quite possible tha a part of that impulsive decline has started alrerady.

Support/Resistance:

1.0605 - WR2

1.0570 - WR1

1.0567 - Swing High

1.0551 - 1.0558 - SUPPLY ZONE | KEY LEVEL FOR BEARS |

1.0535 - Key Intraday Support levels of Golden Trendline |

1.0519 - Weekly Pivot

1.0509 - Technical Support

1.0483 - WS1

1.0470 - Technical Support | KEY LEVEL FOR BULLS |

1.0435 - WS2

1.0398 - WS3 | 61%Fibo

Trading recommendations:

Long positions should be in play only if the golden trendline is broken. Otherwise, if the area between Weekly Pivot level at 1.0591 and Technical Support at 1.0509 will hold - the short side of the market should be played with the possible 1.0470 level test (and eventually, break out).