USD/CAD technical set-up points to the possibility of being the first leg of a correction, notes Goldman Sachs.
"In January, the market completed a multi-year 5-wave sequence that had started at the Jul. ’11 low. This look very similar to the 5-waves on the Trade Weighted USD chart. For this reason, need to be careful of getting too carried away with a move higher.
Eventually, want to see a short-term recovery as an opportunity to add bearish exposure," GS advises.
"A complete ABC correction typically ends up in wave 4 territory of the preceding cycle; in this case wave IV ranged between 1.2835 and 1.19," GS adds.
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