USD/CAD Elliott Wave
Last Week the USD/CAD pair finished developing of the corrective wave 4 (coloured purple) and we could observe downward movement at the end of the week when developing of the final impulsive 5 wave starts. During Friday's Asian and European sessions we could observe a descending movement from 0.9810 towards the 0.9780 level and we can consider this move as end of the (1) wave (coloured orange) of the bigger 5 wave (coloured purple). Therefore, during the early New York session the USD/CAD pair did not manage to hold this level and the price started pushing higher reaching a new daily high at 0.9851 level. Today this major pair finished developing of the (2) corrective wave (coloured orange) at 0.9853 level and we are expecting to see the price lower for the next few days. In accordance with our wave rules and taking into account that the wave 3 should retrace 161.8% of the wave 1, we can define the potential targets with Fibonacci Extensions (0.9860-0.9780-0.9853), with Take Profit 1 at 0.9727 (161.8% of wave 1), and Take Profit 2 0.9697 (200% of wave 1). To reduce the risk, we can use invalidation at 0.9860 level as Stop Loss. Also it is necessary to monitor CAD RMPI m/m and U.S. ISM Manufacturing PMI, Fed Chairman Bernanke Speaks data that can change the rate of the pair.
Support and Resistance
(S3) 0.9751 (S2) 0.9778 (S1) 0.9794 (PP) 0.9821 (R1) 0.9848 (R2) 0.9864 (R3) 0.9891
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 0.9810 with Stop Loss 0.9860, Take Profit 1 at 0.9727, and Take Profit 2 at 0.9697 are recommended.