FX.co ★ USD/CAD analysis for October 16, 2013

USD/CAD Elliott Wave
Since our last analyses, the USDCAD pair has been trading upwards, just like we expected, impulsive wave .i (coloured black) of the bigger wave c (coloured blue) has been developing. Yesterday, during the early Asian session we could observe descending movement from 1.0359 towards the 1.0331 level, and we can consider this move as the end of the wave b (coloured blue). Therefore, during the European and New York sessions, when developing of the final c wave started, this major pair moved higher and reach a new high at the 1.0390 level. At the moment, the USDCAD pair is trading around the 1.0373 level, and we are expecting to see more upward movements in the early European session today. In accordance with our wave rules and taking into account that wave C should retrace 100% of wave A, we can define the potential targets with measuring wave A with take profit at 1.0480 (100% of wave A). To reduce the risk, we can use invalidation point at the 1.0330 level as stop loss.

Support and Resistance
(S3) 1.0285, (S2) 1.0308, (S1) 1.0344, (PP) 1.0367, (R1) 1.0403, (R2) 1.0426, (R3) 1.0462.

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movements. That is why long position at the level of 1.0390 with stop loss at 1.0330 and take profit at 1.0480 are recommended.