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USDCAD: Bearish reversal unfolding
USDCAD has been trading aggressively lower in the last couple of weeks after a decisive break through the rising trendline connected from May of 2015 lows, which is an important evidence for a change in trend. That said, the price of USDCAD is likely to go even lower as we assume that this is now wave A/I; first wave of a minimum big three waves of decline from 1.4680 high. But nothing moves in straight lines so we need to be aware of a corrective bounce up in wave B/II which may retrace even to 1.3300-1.3450 once current blue wave five is finished, at 1.2500-1.2700 area.


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USDCAD is higher in the last 12 hours but an open gap suggests that sooner or later the price will turn back down. Ideally, we will see a continuation lower into a red wave 5) that can represent a final leg within an ending diagonal as shown on the 4h chart, down from 1.3296. If we are correct, then the pair is in the late stages of a big impulse wave A/1 that can bottom this week, ideally around 1.2700.


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