Wave C of Measured Movement is probably unfolding

• USD/CAD reversed trend and started to decline.
• It probably forms wave C of a large ABC or Measured Move pattern.

USD/CAD has turned around and is starting to drop into a new downtrend. It is likely in a near-term downtrend now, tipping the odds in favor of higher sales. A break below 1.3487 (September 23 low) would likely confirm more downside of targets towards the base of the range (see below).

USD/CAD Daily Chart

USD/CAD’s move down from the high that started on August 5 looks like an ABC or “Measured Move” pattern (see the labels on the chart above). Such patterns are like large zigzags. Wave C usually reaches a similar length to wave A, or at least a Fibonacci 61.8% of A.

As USD/CAD now appears to be forming an ABC pattern, wave C is likely to unfold and descend substantially. Such a leg down would likely fall into the lows of the range (shaded orange rectangle in the chart above). Meanwhile, the more conservative 61.8% target is at 1.3326.

A break below 1.3466 (September 6 low) more solid bearish confirmation.