Trade Idea: USD/CAD – Buy at 1.2395

USD/CAD – 1.2543

Trend:  Down

 
Original strategy       :

Buy at 1.2395, Target: 1.2595, Stop: 1.2335

Position: –

Target:  –

Stop: –

 
New strategy             :

Buy at 1.2395, Target: 1.2595, Stop: 1.2335

Position: –

Target:  –

Stop:-

Although the greenback has rebounded again after finding support at 1.2433, reckon upside would be limited to 1.2555-60 and near term downside risk remains for another retreat, below 1.2460-65 would bring test of said support at 1.2433, break there would bring retracement of recent rise to 1.2395-00 where renewed buying interest should emerge, bring another rise, above 1.2555-60 would signal the pullback from 1.2599 has ended, bring retest of this level, break there would extend the rise from 1.2061 low (wave iii trough) towards previous resistance at 1.2663 but upside should be limited to 1.2700 and price should falter well below another previous resistance at 1.2778. 

In view of this, would not chase this rise here and would be prudent to buy again on pullback as 1.2395-00 should limit downside. Below 1.2395-00 would bring correction back to 1.2350-55 but reckon indicated support at 1.2313 would hold. Only a drop below 1.2313 would abort and signal the aforesaid rise from 1.2061 has ended, bring further fall to 1.2254 support, however, reckon downside would be limited to another previous support at 1.2197, bring rebound 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.