USDCAD: Forecast - Cloudy But Now With Clearing Picture

With the recent move down and now a nice retracement, the previous murky picture is becoming more and more clear. There still are many different paths that prices could take but what I am presenting here are 2 scenarios that I think are most likely. As usual, I do "look ahead" studies and this is one of them. Though they are only STUDIES and are very loosely based on some projections, they are much too early to know with any confidence that either will be correct as there isn't enough data to say so. But they are useful in planning and preparation. Normally wouldn't post these things as I do them for my own use but thought some might find it useful. If not, then maybe I won't post them in the future. But for those that always ask me how professional trader's plan their trades, this is an example of some of the many preparations that needs to be done to be successful. It isn't as easy as just sitting around waiting for some pattern to show up. Successful trading takes a lot of preparation and planning.

"Luck = hard work and preparation". Good things DON'T come to those who just wait. They come to those that work hard and are prepared to take advantage of good opportunities when they present themselves.

So here are the 2 scenarios:

Scenario #1
In this scenario you see on the MAIN chart above, that recent downtrend is not over and it has only completed the wave iii of the 5-wave wave (A). The recent pullback is just the wave a of the wave iv which when finished will have retested that upper TL (extended) of the former triangle pattern. Also a minor structure are and just below the wave i of this 5-wave wave (A). When wave iv is done, we'll see a wave v down to a MAJOR SR Structure zone where wave (A) will complete and then we will see a wave (B) commence to go up to retest the highs.

Scenario #2
In this scenario, I have that large recent down trend as a completed 5-wave move marked as the completion of wave (A) of a large wave 4 that is in its' early stages of development. Because its' labeled as a completed wave (A), then the next move must be a wave (B) up. IF wave 4 unfolds as a ABC (5-3-5) zigzag (and that's a BIG IF right now), then we will see a 3-wave wave (B) to retest the highs. This 3-wave wave (B) would itself unfold as a ABC (5-3-5) zigzag pattern.

Although I've laid out these 2 possible scenarios, as I mentioned, it's just way too early to say which one is correct or if neither is correct. There are many other ways this wave 4 correction can unfold such as a triangle pattern as well for example. Or maybe this isn't a wave 4 at all! Only time will reveal the true story. We can only guess. I'm just posting this to give some kind of expectation as to where prices could go next.

*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 or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. 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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