USDCAD –Daily Chart
USDCAD has been in a corrective phase and is approaching the end of red wave (A) which has an ideal target at 1.2500. Since this pair has entered a major wave (4) correction, trying to predict a certain pattern it might follow would be improper. We need to analyze what market gives us.
In this daily chart, we see a clear A-B-C (3-3-5) structure that might extend 162% to complete only one cycle (wave (A)) of this bigger wave (4)
USDCAD – 4H Chart
In this 4h chart, we notice that we are seeing minor wave iii of red wave 5 forming and it needs a new lower low to be completed. If 1.2890 is not breached, we expect a new low and then a bounce back towards same levels.
- Trying to pick the bottom here and enter long would be irrelevant and might hurt your p&l.
- Also, shorting heavily might result in expectation disappointments due to every new low being immediately bought.
- We are waiting for our lower target to re-evaluate any long swing trades.