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ANALYSIS: USDCAD: Long Term Trend Line Broken. What Does It Mean

FX:USDCAD   U.S. Dollar/Canadian Dollar
507 5 11
The long standing trend line that marked the entire wave iii             advance (see 4Hr and Daily Charts below) that started from 6/18, 2015 has been decisively broken. Now that it has, what does that mean? Does that mean that we are now in for a long ride down? If so, how far?

To answer that question, I have to go to my wave count and see what it is sayihng. But first, let me explain about what you are seeing in the chart above. Prices are declining explosively right now. As you can see, I marked out a potential bullish bat that may be filled soon. Further out, there is a bullish cypher waiting beyond the bat. Both these patterns are bullish pattern and the cypher in particular may give us a clue as to how far prices will drop. Why? Read on....

OVERVIEW - Weekly Chart
This is showing what i have as my wave count for the large impulse wave up. As you can see by my wave count, I do not believe wave 5 of this impulse wave up is done.
snapshot

DAILY CHART - Close Up Of The Current Wave V
You'll notice on here that I have drawn the POTENTIAL Bearish Crab that may complete if prices were to move further up after this retracement. If it does, that movement may complete the entire larger 5 wave impulse wave advance up.
snapshot
4Hr CHART - Showing The Wave iii             Trend Line
snapshot

CONCLUSION AND MY TRADE PLAN
As shown by my wave counts, I believe that this pair has just started it's wave iv of the 5 wave ending wave 5. Notice that the bullish cypher (blue) would end near the .382 retrace of the wave ii advance. If prices were to reverse back up from here, I suspect we will have a very quick and explosive wave v up as 38.2% retracements usually lead to a strong move. I regret to say that I missed the top here and did not get in yet. so I am also lookng for a chance to get in on this wave iv down. As of right now, the bullish bat has not been filled just yet. My plan is to wait until it does get filled and watch the PA. If prices do start retracing back up after the bullish bat gets filled, this will give me a chance to get in and go SHORT for a larger move down to the bullish cypher . For now, I'm sidelined. If I were to miss this entire wave iv move, I would not be too unhappy about it. I'll be looking to catch the next and i think final wave up.

*DISCLAIMER:
Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!

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I think the bullish cypher you have placed is a good probability, given there are good liquidity levels below it.
Reply
Thanks for the comment, David. Yes, I agree. This pair remains in a STRONG uptrend. Ergo, my reasoning that we will see a 38.2% retrace only before returning to the main trend. Which has confluence with the bullish cypher end point. In addition, USDCAD has a STRONG inverse correlation factor (+90% last I checked) with AUDUSD both being commodity-based pairs. And AUDUSD still has a long ways to go in its down trend. In fact, I strongly believe that pair will hit 70 cents this year. For all those reasons, this down move is only a shallow retrace and that's it. I think there are going to be a lot of amateur trader's who will get caught trying to SHORT this thing for a big move down when there isn't going to be. GL!
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do u think tht usdcad ll go down to D the next days ...??
i ve selled at 1.3008
HOP U CAN ANSWER ME SIR.
Reply
It is what my analysis is telling me. But keep in mind, the market will always do whatever the market wants to do. It is our job as a trader to try to figure out as best we can what will happen. There is never any guarantee we'll be right. We can only guess at best. So whenever we take a trade, we must also be willing to accept the loss if we are wrong. I can't tell you for sure that it will go down. It is only my guess. And remember, I am NOT providing any trading signals or calls for you to follow. You are not my client. I am only posting what I am thinking and what I am doing for everyone's information. It is up to you to do with that information what you think is best for you. Thanks for the question. Good luck!
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I agree, I think the loger term Butterfly will kick in a little higher, then it will be time to short
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