Top Trade Idea for May 3rd, 2016 – USD/CAD
By Gregor Horvat on May 3, 2016 09:14:49 GMT
USDCAD has been trading quite aggressively lower for the last couple of weeks after a decisive break out of an upward channel connected from May of 2015 lows, which is an important evidence for a change in trend. That said, price of USDCAD is likely going even lower as we assume that this is now wave A/I; first wave of a minimum big three waves of a 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 1.3200 zone, where resistance is seen.
As expected, USDCAD made a nice sharp reversal from our Fibonacci support zone at 1.2459 region towards higher prices, after an ending diagonal pattern was recognized in red wave 5) of 5-circled. As stated this ending diagonal pattern is a powerful reversal pattern, that usually tends to reach the start point of the structure in which it was recognized. In our case we wouldn’t be surprised if the upside momentum continued towards 1.330.1.334 zone, while invalidation level at 1.2460 holds.
We will consider longs on a pullback from around 1.2600-1.2620, while the market is trading above 1.2460 invalidation level.
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About Gregor Horvat
Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/ Try EW-Forecast.com’s Services Free For 7 Days at http://www.ew-forecast.com/service
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