Earlier this month, on May 5th, USDCAD fell just 7 pips short of the 1.3800 mark and it looked like it is only a matter of time before the pair breaches this round figure. Then, the bulls suddenly got tired and their next attempt to lift the dollar to a new multi-month high against the Canadian dollar failed, as well. Instead, USDCAD plunged to as low as 1.3471 as of today, representing a 240-pip decline since our May 15th analysis was sent to clients with the chart below included.(some marks have been removed for this article)
As visible, while the pair was hovering around 1.3710, the Elliott Wave Principle suggested a significant selloff should be expected, as long as the invalidation level at 1.3793 remains safe. In other words, this key level was the perfect place to put the stop-loss order for a short position. Here is an updated chart showing USDCAD’s recent developments.
The U.S. dollar started losing ground against its Canadian counterpart almost immediately, so 1.3793 was never put to a test. Less than 2 weeks and 240 pips to the south later, we are now bearing the fruits of another opportunity provided by the Wave Principle. Many more will follow.
