Trade Idea: USD/CAD – Stand aside

USD/CAD – 1.2481

Trend:  Down

 
Original strategy       :

Exit long entered at 1.2515,

Position: – Long at 1.2515

Target:  –

Stop: –

 
New strategy             :

Stand aside

Position: –

Target:  –

Stop:-

As the greenback retreated after meeting resistance at 1.2591, retaining our view that further consolidation below indicated previous resistance at 1.2599 would be seen and test of 1.2433 support cannot be ruled out, however, break there is needed to signal top has been formed at 1.2599, bring further fall to 1.2400 and later towards 1.2350-55 but indicated previous support at 1.2313 would hold from here.

On the upside, above 1.2530-35 would bring another bounce towards 1.2591-99 but only break there would revive bullishness and signal the rise from 1.2061 low (wave iii trough) has resumed for further gain towards previous resistance at 1.2663, however, upside should be limited to 1.2700 and price should falter well below another previous resistance at 1.2778. 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.