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12.08.201312:52 Forex Analysis & Reviews: USD/CAD analysis for August 12, 2013

Long-term review

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USD/CAD Elliott Wave
Last week, the USD/CAD pair traded downwards, an impulsive wave 1 (coloured blue) of the bigger wave (C) (coloured blue) was developing. During Friday's European session, we could observe ascending movement from 1.0286 towards 1.0353 and we can consider this move as the end of the corrective wave .4 (coloured green). Therefore, during the New York session this major currency did not manage to hold this levels and the price dropped to the level of 1.0274 (end of the 1 wave). At the moment, the USD/CAD pair is trading around 1.0313 and we are expecting to see three swings higher before the price turns lower when developing wave 2 ends. In accordance with our wave rules and taking into account that wave 2 should retrace 61.8% of wave 1, we can define potential targets with measuring wave 2 with take profit at 1.0380 (61.8% of wave 1). To reduce the risk, we can use invalidation point at 1.0274 level as stop loss.

Support and Resistance
(S3) 1.0177 (S2) 1.0226 (S1) 1.0255 (PP) 1.0304 (R1) 1.0333 (R2) 1.0382 (R3) 1.0411

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upwards movement. That is why long position at level 1.0320 with stop loss at 1.0274 and take profit at 1.0380 are recommended.

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