USD/CAD reversed sharply to the downside at the end of the last week, clearly in impulsive fashion, so structure is now pointing lower for the currency pair if we consider that rally from 1.0243 was made in three legs, called a correction. We are talking about wave B that has a high in place at 1.0442 from where we expect an impulsive extension down in wave C, back to 1.0243 and possibly even to 1.0150 in this week while 1.0442 is not breached. Recently minor correction has stopped at 1.0350-1.0370 resistance zone from where weakness could resume.
USDCAD 4h Elliott Wave Analysis Chart
On a daily level we can see that prices have turned bearish maybe just temporary but in either case we need minimum three legs down. Why? Because that’s a minimum structure of a correction, called a zig-zag. So even if larger the trend is still up and if current bearish waves are small piece within larger uptrend, the contra-trend movement still needs to be made by three sub-waves.
USDCAD Daily Elliott Wave Analysis Chart