USDCAD - SELL IDEA

Elliott Wave practitioners might observe a compelling setup on USDCAD for a potential SHORT. The currency pair seems to have completed an upward corrective wave (b), reaching towards the 0.618 Fibonacci retracement level, and is now potentially embarking on a bearish wave (c) journey.

This turn aligns with the currency pair's reaction to a confluence of resistance levels, and the bearish wave (c) is expected to be at least as long as wave (a), with Fibonacci extensions like 1.0 and 1.618 offering prospective targets. The market's sentiment towards the USD and CAD, influenced by oil price fluctuations and trade balance data, may amplify this move.

For traders considering this setup, entering SHORT positions with confirmation of the downtrend continuation could be prudent, setting stop-loss orders above the recent highs of wave (b) for risk management. The initial target may be set at the beginning of wave (a), with further profit-taking potentially around the 1.618 extension.

As always, it’s critical to keep an eye on the macroeconomic factors that could sway the pair, and to be prepared to adjust the trade plan as the market unfolds

Trade closed: target reached