By Orbex
USDCAD prices have seen a short-term upside since last month’s low of $1.2415.
However, the mini-rally is likely part of a correction in wave 2 of a 5-wave impulse towards fresh multiyear lows.
The correction in wave 2 could last a little longer, given wave two corrections usually retrace at least 61.80%. This should bring the market around to the $1.2650 zone, where further guidance will reveal itself.
The medium-term structure could complete cycle wave x and reverse towards the $1.45 level in the long term. But for now, it hints at a recent completion of wave (4) of Ⓒ.
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If bulls push prices past the descending channel’s upper trendline, the probabilities of bearish continuation will decrease. Contrary, an alternative scenario could happen, and that is a bullish impulse.
The impulsive scenario should receive validation on a triangle formation in wave 4.
Only a symmetrical triangle would complete the structure above wave 1, which is a requirement for 5-wave impulses.
In addition, we might receive a running flat. However, this structure would appear in the medium-term, following a break of the channel.
A bullish impulse could send prices soaring toward $1.45 as the cycle degree correction in wave x would be, in this case, complete.
By Orbex
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