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.
USDCAD, Daily
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.
USDCAD, 4H
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