This year, the pair USDCAD declined by 4.22%. Currently, on the one hand, the Loonie moves at the lowest levels of the year. On the other hand, market sentiment is mostly bullish. But we expect a new lower low before seeing three bullish corrective waves.
The market sentiment
The “market sentiment” is a valuable tool that allows us to observe how traders position themselves. The following image shows that 90% of traders are on the long side, but this doesn’t mean that we have to enter in the long side.
The USDCAD daily chart shows a second bearish leg. The downward sequence still has pending bearish targets. We expect new drops to the area between 1.29709 and 1.29002. Once the price reaches this zone, we foresee an upward move in three waves to the 1.32 area. The invalidation level is at 1.36464.
For more information about Market Sentiment, please visit the following video lesson.
Remember that the price is not forced to move as our outlook proposes. The charts released corresponds to an educational application of the Elliott Wave Theory. Comments issued don’t represent an investment recommendation.