“Do not be surprised, if the next move USDCAD makes is to the south.” This is an excerpt from our previous article about USDCAD, which we published on May 21st. The pair was trading around 1.0940. As shown on the chart below, prices fell by 120 pips, finding bottom at 1.0820 and reversing from there. Currently at 1.0930, it is time to examine the situation once again.
It looks like the whole pattern is a flat correction. The standard wave structure for a flat is 3 waves for A, 3 waves for B and an impulse in wave C. You can see all these characteristics on the 1-hour chart of USDCAD. Corrections are movements against the larger trend and as such, they are expected to be fully retraced. This means, that after the end of wave C, we will be expecting another decline, probably below 1.0810.
