USD/CAD – 1.2777
Trend: Near term up
Original strategy :
Exit long entered at 1.2755
Position: – Long at 1.2755
New strategy :
Although the greenback fell briefly to 1.2701 yesterday, as the pair found good support there and has staged a strong rebound, suggesting a temporary low has possibly been formed there and consolidation with mild upside bias is seen for gain towards resistance at 1.2836 resistance but break there is needed to signal the correction from 1.2917 has ended, bring further gain to 1.2880 and later retest of 1.2917. Looking ahead, as we are still treating this rebound from 1.2061 as wave iv, reckon 1.2975-80 (61.8% Fibonacci retracement of wave iii) would limit upside and 1.3000 should hold, bring selloff later in wave v. 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.
On the downside, expect pullback to be limited to 1.2725-30 and said support at 1.2701 should hold, bring another rebound later. Below said support at 1.2701 would signal the fall from 1.2917 top is still in progress for a least a retracement of recent rise to 1.2670, then test of support at 1.2636 but a drop below this level is needed to signal recent rise has ended at 1.2917, bring further fall to 1.2600 and later towards 1.2550-60.
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.