FX.co ★ USD/CAD analysis for October 28, 2013

USD/CAD Elliott Wave
Last week, the USDCAD pair was trading upwards, five waves within corrective wave A (coloured blue) of the bigger wave [b] (coloured black) hwas developing. During Friday's Asian and European sessions, we could observe an ascending movement from 1.0408 towards the 1.0456 level. Therefore, during the New York session this commodity pair continued trading in a bullish mood and the price reached a new high at 1.0495. We can consider this move as the end of the .5 wave (coloured black) of the a cycle (coloured blue). At the moment, the USDCAD pair is trading around the 1.0440 level, and we are expecting to see continuation of the bearish mood for the next couple of sessions. In accordance with our wave rules and taking into account that wave B should retrace 50% of wave A, we can define the potential targets with measuring wave A with take profit at 1.0365 (50% of wave A). To reduce the risk, we can use resistance point at the 1.0459 level as stop loss.

Support and Resistance
(S3) 1.0368, (S2) 1.0388, (S1) 1.0419, (PP) 1.0439, (R1) 1.0470, (R2) 1.0490, (R3) 1.0521.

Trading forecast
Proceeding from Elliott wave rules today, the trend is expected to begin the downward movements. That is why short positions at the level of 1.0420 with stop loss at 1.0459 and take profit at 1.0365 are recommended.