USDCAD: Eyeing 1.35 As Part Of Primary Correction

On USDCAD, the final part of the cycle degree wave x seems to be currently forming. It consists of the primary sub-waves Ⓐ-Ⓑ-Ⓒ.

Wave Ⓐ is a completed bullish zigzag, wave Ⓑ is a double zigzag, and wave Ⓒ,  a bullish 5-wave impulse consisting of intermediate sub-waves (1)-(2)-(3)-(4)-(5).

Given that the minor wave 5 is currently under development, the trend could continue to the 1.35 area. This target would respect the tenancy of 5-wave impulses (3) and (5) being equal.

Taking into account the current proportions of the intermediate waves, the completion of the bullish trend in the area of the specified level is very likely.

An alternative scenario indicates that the intermediate wave (4), which is part of the primary impulse Ⓒ, might not be completed just yet.

With such structure in mind, wave (4) can take the form of a minor horizontal triangle A-B-C-D-E.

If this hypothesis is correct, we can expect to see a sideways movement, as indicated on the chart.

After the completion of wave (4), the trend will likely continue in wave (5). This could end near or above the 1.35 area, as triangle breakouts usually come with strong momentum.