Trade Idea: USD/CAD – Hold long entered at 1.2285

USD/CAD – 1.2372

Trend:  Down

 
Original strategy       :

Bought at 1.2285, Target: 1.2450, Stop: 1.2300

Position: – Long at 1.2285

Target:  – 1.2450

Stop: – 1.2300

 
New strategy             :

Hold long entered at 1.2285, Target: 1.2450, Stop: 1.2300

Position: – Long at 1.2285

Target:  – 1.2450

Stop:- 1.2300

As the greenback has maintained a firm undertone after breaking above previous resistance at 1.2391, retaining our bullishness for the erratic rise from 1.2061 low to bring retracement of recent decline, hence mild upside bias remains for this move to extend gain to resistance at 1.2425-30, then 1.2450, however, near term overbought condition should limit upside and reckon 1.2500 would hold from here, bring retreat later.

In view of this, we are holding on to our long position entered at 1.2285. Below indicated support at 1.2313 would defer and risk weakness to 1.2254 support (Friday’s low) but only break of latter level would dampen our near term bullishness and signal top is possibly formed, bring test of indicated support at 1.2197, below this level would confirm and bring weakness to 1.2160-65, then towards support at 1.2121, break there would confirm the rebound from 1.2061 has ended and bring retest of this level later, 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 ended at 1.2778, wave v has reached our indicated downside target at 1.2100 and may extend to 1.2000.

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.