[B]Commentary:[/B] We wrote yesterday that “we see it as highly likely that the rally from 1.0484 is the beginning of a third of a third wave. This is the position that often sees the market move the fastest. We expect the rally to accelerate in the next few days.” The USDCAD has rallied over 200 pips from yesterday morning.
The only question is whether or not the rally from 1.0462 is a wave 3 or a wave C. If price rallies much above 1.0821 (100% extension of 1.0340-1.0699/1.0462), then it is likely that the rally is a wave 3 and is headed for a test of the 161.8% extension at 1.1043. From a subjective standpoint, we favor the impulse rally scenario (wave 3) and the idea that the USDCAD has put in a multi-year low at 1.0340. Short term support is at 1.0712. See our special report from July 31 for a longer term outlook at USD/CAD : Going to 1.40? [B]Strategy:[/B] If already bullish then remain so, against 1.0641, target 1.0821 and 1.1043. If not, then sit tight as the current reward to risk does not justify entry