FX.co ★ USD/CAD analysis for December 06, 2013

USD/CAD Elliott Wave
Since our last analysis the USD/CAD pair has been trading downwards, so we need to look for a possibility now that b wave (coloured red) is already complete cycle. Yesterday, during the European session we could observe ascending movement from 1.0651 towards the 1.0699 level and we can consider this move as the end of the corrective wave .ii (coloured black). Therefore, during the New York session this commodity currency did not manage to hold this level and price has dropped to the new daily low at 1.0624 level. At the moment the USD/CAD pair is trading around 1.0665 and while price stay below 1.0699 we can expect to see more bearish movements in this pair.In accordance with our wave rules and taking into account that wave 3 should retrace 200% of wave 1, we can define the potential targets with measuring wave 1 with take profit at 1.0590 (200% of wave 1). To reduce the risk, we can use invalidation point at 1.0699 level as stop loss.

Support and Resistance
(S3) 1.0543 (S2) 1.0584 (S1) 1.0617 (PP) 1.0658 (R1) 1.0691 (R2) 1.0732 (R3) 1.0765

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin downwards movements. That is why short position at level 1.0650 with stop loss at 1.0699 and take profit at 1.0590 are recommended.