I decided to back out to an even bigger picture of the USDCAD and the direction we may be headed next. From the chart, we can see that two complete EW cycles completed between 2016-2019. Also note that they occurred back to back with no corrective action. At first glance, I thought that to be odd; however, upon looking again, the first EW cycle was a downtrend and the "corrective" wave turned in to the second, uptrend, EW cycle. Then we had a "double", or "complex" correction for the next year. This correction can also be viewed as a "consolidation" period for price to stabilize. The pair started its new EW cycle at the beginning of this year and completed Wave 1 of the impulse wave. We are currently testing the 38.2% retracement levels of Wave 1. Price may pull back and test levels here and bounce to start Wave 3; or, the heavy selling pressure may push price further down to the 23.6%, and possibly 14.8%, retracements. We could be seeing a bottom and a good time to start looking for a long position. Wave 3 is the wave to catch, so I'll be keeping my eyes open for a good entry in the coming days.
Trade active:
Long @ 1.35210 w/ SL @ 1.34810
Trade closed: stop reached:
This SL was hit by a low of 1.34803/7. I reentered trade with a SL @ 1.34785. That was hit by the lowest low 1.34683. I then chose to day trade the pair to retrace those losses. Currently analyzing possible impulse/wave 1 setup bouncing from 1.34791 levels.
Still hunting for the beginning of Wave 3 of the bigger picture EW cycle. I believe the market makers/dealers in this pair are getting rid of the "weaker" stops and gearing for a strong Wave 3.
Still hunting for the beginning of Wave 3 of the bigger picture EW cycle. I believe the market makers/dealers in this pair are getting rid of the "weaker" stops and gearing for a strong Wave 3.