USDCAD broke out to a record high today

Market Snapshot:

US economic growth was given an extra boost as the trade deficit gave its lowest reading in 4 years, driven by America's domestic energy revolution. As a result Morgan Stanley has raised its Q4 growth to 3.3% and JPM claim this is more in line with 3% as opposed to 2.5% as previously thought.

USDCAD broke out to a record high today. ​ NZD is by far the strongest single currency this week and currently trading at record highs against CHF, CAD and JPY.

BRENT: Within bearish correction with potential down to 105.20

This trade may take a little while to play out but the bearish bias is assumed due to the speed and trajectory of the direct losses from 111.50 swing high.

We have also broken beneath the Monthly S1 pivot which has also acted as resistance along with the pivotal S/R level of 107.80. As long as 107.80 holds as resistance then next target is the lower area of 106.50 with a suspected breakout down to 105.30.

In the event we break above 107.80 then the preference is to wait for a pullback to this area and seek bullish positions with a possible target around 109.00.

As Brent is traded in USD should the bearish bias play out then this would cause inflow to USD and help it appreciate in strength. Therefor it is always adviseable to keep an eye on the commodity markets even if you trade Forex exculsively.

GOLD: Potential 5-wave count projects target at 1220

Yesterday's analysis played out much better this time around. The broken trendline held and we formed a Hanging Man Reversal (bearish candle with high wick) beneath the resistance level, before reversing and hitting the initial 1228 target.

I am not one to usually use Elliot Waves as part of my day to day analysis but this potential 5-wave move down did jump out at me. Additionally the Fibonacci extension of the 3rd wave does project a potential 5th wave ending around a support level, so I decided to include it in today's analysis.

What I am not as clear on is if we have seen the end of wave 'iv'. If we have then we should see direct losses down to the 1220 area. However we may have to also consider we are still within wave 'iv' and for either a 'flat' (dotted line) or expanded flat to occur before resumption of losses.

Due to the pivotal S/R at 1233 I have excluded the possibility of the expanded flat (as this would break above this level) so my bias is for direct losses down to 1220, with the potential for a rally to 1233 before a resumption of losses.