So in my last post on this pair, I pointed out that a wave 4 down has started and so far, so good. Prices have gone accordingly. But before wave 4 is finished, there obviously would be some kind of up and then down movement. After all, you weren't expecting prices to simply fall straight down, were you? Knowing the nature of wave 4's, it will not be so easy! I showed in the last post where there is an expanding triangle setting up in the wave A of the wave 4 ABC correction. This expanding triangle is about to come to a end and then a 3 wave retracement B wave back up should follow. I suspect that the wave B back up should get to the upper trend line of this expanding triangle before wave C down will commence.
There is also a POTENTIAL bullish bat (blue) that I marked out that should mark the end of the expanding triangle and it's point e. This point should mark the beginning of wave B back up.
MY TRADING PLAN There is still much downside to go on this wave 4 correction. But as I mentioned in my last post, I missed out on the entry SHORT on this pair and am not currently holding any SHORT positions. However, when prices reach the end of this bat, I will take some LONG positions to catch the wave B up and then will look for signs of wave C down to start. But the real reason I will take some LONG positions on this pair is because USDCAD is STILL in a very strong uptrend and this would be a trend trade. So if my count is wrong and this expanding triangle is it for the wave 4 correction and the main trend does resume, I'll be in on it and ride wave 5 to new highs.