FX.co ★ Technical analysis of USD/CAD for May 7, 2015

General overview for 07/05/2015 08:20 CET

The impulsive bullish count had been invalidated because the wave two low overlapped the beginning of wave one. Therefore, the recent rally up couldn't be the beginning of a trend resumption. It looks like it was only a short-term bounce to make the wave XX brown high at the level of 1.2203. This all means there is one more wave to the downside missing to complete the wave Z brown of the overall corrective structure in wave 4 green. There are two possible resistance levels from where a slide can start: one is the intraday resistance at the level of 1.2086 and the second is dynamic golden trend line resistance around the level of 1.2138. Please notice the bullish divergence has formed, but it might have only a shot-lasting effect, unless the level of 1.2203 is violated.

Support/Resistance:

1.1938 - Swing Low

1.2029 - WS1

1.2086 - Intraday Resistance

1.2115 - Weekly Pivot

1.2138 - Trend Line Resistance

Trading recommendations:

Daytraders should consider a short-term buying opportunity from current price levels with a tight SL and TP at the level of 1.2086 with a possible extension up to the level of 1.2138.