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USDCAD has been trading aggressively lower earlier after a decisive break out of an upward channel connected from May of 2015 lows, which was an important evidence for a change in trend. That said, the price of USDCAD is likely going even lower as the decline from 1.4680 has unfolded in five waves, labeled as wave A/I; first wave of a minimum big three waves of a decline. However, nothing moves in straight lines so we need to be aware of a corrective bounce up in wave B/II, which is now already underway with still some room left towards 1.3600 area, since we expect bigger corrective three wave recovery.

USDCAD, Daily

D USDCAD june 16 2016

On the lower time frame, USDCAD has been trading south at the start of the month, but this is now changing after three waves of a decline that found a support a week back near 1.2650. We labeled this as the end of wave B-circled, that is part of a bigger recovery. So far, we have seen a very nice rise back above 1.2906, where overlap suggests that blue wave C-circled is underway to above 1.3200 and possible even to 1.3350.

USDCAD, 4H

usdcad 4