On July 12 I showed you the possible long term alternate count, which would be put into motion if we saw a break above 1.0809, well we did see a break above that resistance yesterday, which shifts the odds to this long term alternate count. If we are expecting a much stronger USD it will make sense if CAD became weaker.
What should be expected from this alternate count? First of all, we can conclude, that wave C of the corrective rally from 0.9406 still is developing and we are in the early parts of wave 5 higher. The ideal target for this wave 5 will be in the 1.1639 - 1.1666 area, where we will find the 61.8% corrective target of the decline from the Marts 2009 high at 1.3063 to the July 2011 low at 0.9406, but wave 5 will also be 61.8% of the distance travelled from the bottom of wave 1 at 0.9633 to the top of wave 3 at 1.1278.
We will find some resistance at the 50% target of the distance travelled from the bottom of wave 1 to the top of wave 3 at 1.1441, but the target in the area between 1.1639 - 1.1666 seems more attractive.
Short term look for support at 1.0749 to protect the downside for the next rally higher.
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