Trade Idea: USD/CAD – Exit short entered at 1.2595

USD/CAD – 1.2600

 
Original strategy       :

Sold at 1.2595, Target: 1.2395, Stop: 1.2655

Position: – Short at 1.2595

Target:  – 1.2395

Stop: – 1.2655

 
New strategy             :

Exit short entered at 1.2595,

Position: – Short at 1.2595

Target:  –

Stop:-

Despite falling to 1.2441 yesterday, the subsequent strong rebound suggests the fall from 1.2778 has possibly ended there and upside risk is seen for further gain to 1.2640-50, however, as broad outlook remains consolidative, reckon upside would be limited to resistance at 1.2691 and price should falter below 1.2750, bring another decline. We are keeping our count that wave v as well as wave (C) ended at 1.3794 and impulsive wave (i ii, i ii) is now unfolding with minor wave iii ended at 1.2414, followed by wave iv correction possibly ended at 1.2778, wave v should extend towards 1.2300.

In view of this, would be prudent to exit short entered at 1.2595 and stand aside for now. Below 1.2550 (previous minor resistance) would bring weakness to 1.2500 but only break of latter level would suggest the rebound from 1.2441 has ended, bring another fall to this level, having said that, the greenback needs to penetrate indicated previous support at 1.2414 (wave iii trough) to confirm decline has resumed in wave v to 1.2350 and then 1.2300-10. 

To recap, wave B from 1.3066 is unfolding as an a-b-c and is sub-divided as a: 1.2192, b: 1.2716 and wave c is a 5-waver with i: 1.1983, ii: 1.2506, extended wave iii with minor iii at 1.0206, wave iv ended at 1.0781 and wave v as well as wave iii has ended at 0.9931, hence the subsequent choppy trading is the wave iv which is unfolding as (a)-(b)-(c) with (a) leg of iv ended at 1.0854, followed by (b) leg at 1.0108 and (c) leg as well as the wave iv ended at 1.0674. The wave v is sub-divided by minor wave (i): 0.9980, (ii): 1.0374, (iii): 0.9446, (iv): 0.9913 and (v) as well as v has possibly ended at 0.9407, therefore, consolidation with upside bias is seen for major correction, indicated target at 1.3700 and 1.4000 had been met and further gain to 1.4700 would be seen later.