Trade Idea: USD/CAD – Sell at 1.2720

USD/CAD – 1.2682

Trend:  Near term up

 
New strategy             :

Sell at 1.2720, Target: 1.2570, Stop: 1.2780

Position: –

Target:  –

Stop:-

The greenback ran into heavy selling pressure at 1.2837 earlier this week and has dropped sharply, suggesting the rebound from 1.2665 has ended there and consolidation with downside bias remains for another test of said support, however, break there is needed to signal another leg of decline from 1.2917 top is underway for weakness to support at 1.2636, below there would bring stronger correction of recent rise to 1.2600 and later towards 1.2550-60

In view of this, we are looking to sell the pair on recovery as 1.2720-30 should limit upside and bring another decline later. Above 1.2780-90 would dampen this bearish view and prolong consolidation, risk another bounce to said resistance at 1.2837 but only break there would signal correction from 1.2917 has ended instead, bring further gain to 1.2880 first.

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.