The USD/CAD surged higher over the recent trading days, as suspected in previous analyses.
Momentum is strong and there is room for more upside.
This analysis will provide a brief update on the unfolding price action of the USD/CAD.
The swing which started on Feb 16 has pushed up and elongated, making a very good case for green Wave 3 to be in progress. The main target for green wave 3 is the 161.8% Fibonacci level relative to the size of wave 1, which puts the target around 1.3150.
The first indication that peak momentum of green wave 3 is reached can be seen in the subtle divergence between the Fisher indicator versus the Awesome Oscillator. The Fisher is a more sensitive momentum indicator and therefore useful for validating internal waves of larger waves. In this case, we see that the AO is at a peak, while Fisher is already creating a lower peak than previously (see chart). This often occurs when an internal wave 5 of 3 is being approached and should be seen as the first warning sign that a Wave 4 correction could be about to start. Wave dimensions would be very neat for the start of pink wave 4 around current levels. However there is always the potential for wave 3 to extend further, in which case the aforesaid divergence is not valid.
In terms of trade setups, it is probably best to wait for a wave 4 correction before considering new buy positions.
All the best along your trading journey