The rise in the USD/CAD since July 2011 has been wave C of an ABC zigzag-type correction.
The wave B was a triangle that gave rise to the majority of the rally of wave C, up until wave 3. The 5th wave has already developed 5 component waves, and even the 5th extended component wave appears to be complete with 5 subwaves.
RSI divergence between the 3rd and 5th waves reflects that the rally is weakening and may be done soon. Look for an impulsive (5-wave) decline followed by a partial 3-wave retracement as a potential short entry point.
The correction will be retraced more than 100%, as the primary long-term trend in USD/CAD is down.
The wave B was a triangle that gave rise to the majority of the rally of wave C, up until wave 3. The 5th wave has already developed 5 component waves, and even the 5th extended component wave appears to be complete with 5 subwaves.
RSI divergence between the 3rd and 5th waves reflects that the rally is weakening and may be done soon. Look for an impulsive (5-wave) decline followed by a partial 3-wave retracement as a potential short entry point.
The correction will be retraced more than 100%, as the primary long-term trend in USD/CAD is down.