Yesterday the USD/CAD pair was developing corrective wave 2 (coloured blue). During the Asian and European session we could observe descending movement towards the 1.0265 level. Therefore during the New York session the USD/CAD pair continued trading in a bearish mood and price fell under the 1.0255 level. Today during the early Asian session the USD/CAD pair found support at 1.0250 (end of the 4 wave) and price started pushing higher. At the movement this major pair is developing impulsive 3 wave (coloured blue) and we are expecting to see price higher today. In accordance with our wave rules and taking into account that the wave 3 retraces 161.8% of the wave 1, we can define the potential targets Fibonacci extensions (1.0200-1.0325-1.0250) with Take Profit 1 at 1.0396 (100% of wave 1) and Take Profit 2 at 1.0467 (161.8% of wave 1). Support level at 1.0240 can be used as a Stop Loss point. Also it is necessary to monitor the U.S. Core Retail Sales m/m, PPI m/m, Retail Sales m/m, Core PPI m/m, Business Inventories m/m, Crude Oil Inventories and 10-y Bond Auction data that can change the rate of the pair. Alternation: We are still in the corrective wave 2 (coloured blue) and if price break 1.0250 we could expect the next support at the 1.0220 level.
Support and Resistance Levels (S3) 1.0211 (S2) 1.0238 (S1) 1.0255 (PP) 1.0281 (R1) 1.0308 (R2) 1.0325 (R3) 1.0351
Trading Forecast Proceeding from Elliott Wave Rules this week, the trend is expected to begin the upward movement. That is why Long positions at level 1.0285 with Stop Loss at 1.0240 Take Profit 1 at 1.0396 and Take Profit 2 at 1.0467 are recommended.
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