FX.co ★ USD/CAD analysis for November 1, 2013

USD/CAD Elliott Wave
Since our last analyses the USDCAD pair has been trading downwards, just like we expected, corrective wave .a (coloured black) of the bigger wave b (coloured blue) has been developing. Yesterday, during the Asian and European session we could observe descending movement from 1.0488 towards the 1.0448 level. Therefore, during the New York session this commodity pair just continued trading in a bearish mood and price has reached a new lows at the 1.0411 level. We can consider this move as the end of the first leg .a of the b wave. At the moment, the USDCAD pair is trading around 1.0430, and we are expecting to see one more drop lower in the next few sessions. In accordance with our wave rules and taking into account that wave B should retrace 50% of wave A, we can define potential targets with measuring wave A with take profit at 1.0382 (50% of wave A). To reduce the risk, we can use invalidation point at the 1.0490 level as stop loss.

Support and Resistance
(S3) 1.0320, (S2) 1.0366, (S1) 1.0398, (PP) 1.0444, (R1) 1.0476, (R2) 1.0522, (R3) 1.0554.

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin downward movements. That is why short positions at the level of 1.0448 with stop loss at 1.0490 and take profit at 1.0382 are recommended.