USD/CAD Pattern Appears Incomplete Towards US Dollar Strength
-USD/CAD appears to be in an extended 3rd wave
-Fourth wave correction to near 1.3473 may offer support for bullish traders
-Target 1.3650 with risk near 1.3430
USD/CAD has gained nearly 450 pips since the Fed announced their recent round of rate hikes in December. Though the pair has run into some structural resistance, namely the November 2016 highs, it appears this Elliott Wave pattern to the upside is incomplete.
It looks as though USDCAD is in an extended 3rd wave higher. Near term, wave relationships fall in near current levels of 1.3544. It would not be unusual for a correction to begin working its way back towards 1.3473. A correction to the 1.3473 area may represent wave iv of wave 3 and may offering support for bullish traders.
If prices are supported and move higher, USDCAD could run up to 1.3650 and possibly 1.3850 in the coming weeks. 1.3430 is the key level for the bullish bias. Below 1.3430 suggests the wave pattern as identified is incorrect and some other pattern is at play.
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USD/CAD Extended 3rd Wave
Created using TradingView
---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.