USDCAD is moving to the downside and we now have a new swing high from around the 1.3720 area. This suggests an ongoing impulsive structure rather than the complex triangle in the B wave that we discussed in our previous update. It seems that another low could still be coming then, but there is very strong and important support around 1.34. That area could trigger a strong reversal, based on a wedge shape, so we should be aware of a potential rebound.
The key question is whether we are looking at a leading diagonal in wave one, which would allow for much lower levels later in wave C, or whether this is an ending diagonal in wave C itself, which would point to a sharp reversal. In either case, weakness may be limited over the coming weeks as price approaches the September 2024 swing low support.
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