USD/CAD Short – 700 pips profit potential

I'm going short USD/CAD around 1.4060-1.4250. Will exit on 2 daily closes above 4250. Target is 1.3500.

On the monthly chart above, note the confluence of several trend lines. Also note the Elliot Wave count which is pretty clearly indicating a completion of a 5-wave cycle within the larger wave 3.

On the daily chart, you can see that price is hitting the confluence of two different-degree channel trendlines. Also, you can see the fractal breakdown of wave-v from the Monthly chart.

If price manages to close above 1.4250 2-3 times (i.e. daily closes above the channel trendlines), I will exit. There could be a strong intraday rally above this level as price overthrows the channel in a final burst, but it should quickly reverse and close within the bounds of the lines. The target is demarked in red, around 1.3500.

SPX 1290 is the level to watch

If SPX does reverse soon, as I’m expecting, 1290 looks like a good level for the market to peak at.

Notice in the chart above that not only is 1290 the level where Wave-C = .5*Wave-A, it is also the exact level where Wave-v of Wave-C = Wave-i of Wave-C. These tight Fibonacci correlations lend support to the idea that the market will top out around 1290.