USDCAD Monthly15-03-2016

In this weekly chart, USDCAD has formed a strong bullish long-term price structure that targets >>$1.60 in the coming years (2-3). In circle, we note a major wave and until now there are 2 clear completed major waves, blue wave 1 and blue wave 2. The extension of these 2 waves gives us a possible blue wave 3 target, which is the 162% extension level at $1.5820. This major wave 3 needs 5 smaller waves to complete and USDCAD is actually in the last moves of wave A of the red wave (4) that might retraced 38% of red wave (3). (Described in the proceeding charts).

USDCAD Daily Wave Count


USDCAD Daily 15-03-2016

In this chart, we see one small fragment of the weekly chart, in particular the red wave (4). We have 3 clear downward moves (A-B-C) that are forming wave (A) of red wave (4).  USDCAD needs to make a lower low towards the 100% extension level of waves A-B at $1.2970-$1.30 to fully complete 5 micro waves for wave C and to end the red wave (A).

After wave (A) has completed we expect at least a 50% retracement from the lows that will complete red wave (B) in the above chart. Possible targets for this wave are 50% and 62% retracement levels.

USDCAD 4h Price Outlook

USDCAD 4h 15-03-2016

In this smaller timeframe chart, we see the micro wave 4 of wave C shown in the second chart. We expect USDCAD to continue its upside momentum and make a higher high and possible find resistance at the red box, at $1.345 (38% retracement level of wave 3) or near $1.3500 (50% retracement level of wave 3). However, given the topping tails of the last 2 candles, it should not be surprising if the recovery stops at these levels (Fibonacci 23%) The downward channel will keep the price in a bearish momentum in the medium term until the red wave C of wave (A) has completed.

Trade Setup Scenario 1:

Short  at 38% retracement level ($1.345 – ½ of position) and near 50% retracement level (<$1.3500 – ½ of position)

Stop loss = above the upper-bound of the channel.

Target = 1.2962

Trade Setup Scenario 2:

If 1.3334 is breached aggressively enter Short at market prices

Stop loss = 1.3405

Target = 1.2962



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