USD/CAD long - Wave 5

USD/CAD has dropped to my target zone of 1.3250 so I'm going long. My ultimate target is 1.44 or higher. I will exit if I see two daily candles that close below 1.3190.

On the weekly chart below, you'll notice a clear Elliot wave count. I believe we are nearly complete with a long-term Wave 4. Note that the market has punished bulls after the massive parabolic spike. However, we are now in the eighth consecutive week of declines. This persistent decline has only occurred twice in the past 20 years: 1996 and 2007. In each of those cases, the market declined for 9 straight weeks, then initiated a sustained rally. Also of interest is that 1.3250 marks a roughly 11% decline from the top at 1.4680. The wave 2 correction back 2012 was also ~11%.

On the daily chart, notice that price dropped from 1.4680 nearly non-stop, but it did carve out a triangle in the middle. Triangles often precede the final thrust before price reverses and continues the main trend (up). You can see a confluence of trendlines that are acting as support. If price closes below these for two days in a row, I will exit my trade at a loss.

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