I love the night before the Non-Farm Payrolls. The markets get quiet, yet whippy, with anticipation in the 24 hours ahead of the release.

For tonight, however, we will be focusing on some longer-term USD/CAD technicals that are shaping up very well. I believe we are in the finishing stages of a 5th wave of Wave 5 at the 1.0650 level. Dissecting this wave 5, we see a clear 5-wave subdivision. Notice wave 1 of 5 traveled 203 points. Often times, waves 1 and 5 will be equal. So if this is to be the case, wave 5 should complete at around 1.066. Another ratio measurement that tells a similar story is that same distance of wave 1, multiplied by the second Fibonacci number, 2, projected down from the beginning of wave 3, projects an end of the move at 1.0654. Further adding to our conviction is a 3-point diverging RSI accompanying a price dynamic known as "3-pushes to a low" coined by Larry Pesavento. Notice the 3 lower pushes within that final wave 5 of 5 just above our zone. Ladies and gentleman, I am boldly going where many men have gone before by bottom picking USD/CAD, but the technicals are lined up.



Breaking funds down even more here, within this wave 5 of 5 is another smaller 5-wave sequence. 85-point wave 1 of this small sequence points to the end of wave 5, of wave 5 of 5 at 1.0663. The low print today was 1.0664 at around 9:00 a.m. ET, and then immediately came in above 1.0700 the figure.

For tonight, I am giving myself a buy zone of 1.0695-75 with stops below 1.0650. Obviously, these are much larger parameters than I usually deal in, so the size will be 1/3rd of my normal. The idea is to carry this through NFP tomorrow morning, so objectives will remain open for tonight. My EUR/USD trade plans from previous sessions remains valid.



Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.