FX.co ★ Elliott Wave Analysis of USD/CAD for February 20, 2014

USD/CAD Elliott Wave
After two weeks of trading in the strong downtrend, the USD/CAD pair found support yesterday at the 1.0905 level, and we can currently see the price trading around the 1.1070/80 area. In the 1-hour chart of the pair, we can see that upper channel line has been broken after an ascending move from 1.0905 towards the 1.1092 level that happened yesterday during early New York session. Today, we must go with idea that corrective wave (X) (coloured red) has completed down cycle from the 1.1227 level and we are going to look for a fresh buying opportunity in the next pullbacks towards the 1.1021-1.0999 area , that will end the wave (ii) (coloured green). In accordance with our wave rules and taking into account that wave (iii) should extend 161.8% of wave (i), we can define the potential targets with measuring wave (i) with take profit at 1.1282 (161.8% of wave (i)). To protect our long positions we can use support at 1.0949 as stop loss level.

Support and Resistance
(S3) 1.0786, (S2) 1.0848, (S1) 1.0962, (PP) 1.1024, (R1) 1.1138, (R2) 1.1200, (R3) 1.1314.

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin upward movements. That is why short positions at the level of 1.1020 with stop loss at 1.0949 and take profit at 1.1282 are recommended.