(Click on image to enlarge)

On the USDCAD chart, we see that the market is developing a long-term corrective wave (4) of the intermediate degree, which is part of the global downward impulse of the primary degree.

Presumably, the corrective wave (4) is a side wave consisting of minor waves W-X-Y-X-Z. Most likely, the W-X-Y-X sub-waves have already been fully built. Not so long ago, the second intervening wave X was completed, and now the price is rising in the final part of the wave (4), that is, in wave Z, taking the form of a minute zigzag.

The growth of the rate in the minor wave Z is possible to 1.314, that is, to the resistance line drawn through the vertices Ⓦ and Ⓩ, this line is marked in green on the chart. Then, upon reaching the specified price level, we can expect a market reversal and the beginning of a decline in bearish impulse (5).

(Click on image to enlarge)

According to the alternative, the formation of the intermediate corrective wave (4) could be fully completed. For this reason, let’s assume that the first sub-waves of the descending intermediate impulse (5) are formed.

It is possible that impulse 1 and bullish correction 2 have been completed today, and now we see a decrease in minor wave 3, consisting of minute green sub-waves.

The target for bears is at the support level of 1.232, this level is located on the red line drawn through the endings of the descending waves ⓐ and X. At the level of 1.232, a market reversal may occur and the formation of a minor correction 4 may begin.

An approximate scheme of possible future movement is shown on the chart.

More By This Author:

XAGUSD: Is The Primary Wave Ⓩ A Double Or Triple ZigZag?
The Week Ahead – US Dollar Rallies
USD Deflates