USD/CAD made a complex three-wave W-X-Y correction after an impulsive five-wave drop from 1.3385 highs and it currently can be trading right around ideal 61,8% Fibo retracement and projected 1.3267 resistance level.

Five waves down and three waves up is actually in EW theory a clear bearish setup, which suggests a continuation to the downside.

So, be aware of a drop here, especially if Crude oil turns up into a correction, which may cause a strong Canadian Dollar. Crude oil made five waves of decline and it can be facing a recovery in upcoming days.

However, a five-wave decline on USD/CAD from current levels would suggest a bearish reversal, just keep in mind that Bears can be confirmed only if goes beneath 1.3110 region, which would open the door for 1.29 area. We remain bearish as long as it's trading below 1.3385 invalidation level.

USD/CAD, 1H

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