Canadian dollar sees two Elliott Wave scenarios — both bullish

USD/CAD has been in bearish mode since Friday, which means that move from 1.0243 was actually made only in three waves, so this rally is now part of a larger complex correction, either a flat or a triangle. For now we will focus on a triangle but need to see an evidence of a low around 1.0300 zone and rally back to 1.0468 to confirm idea of a contracting triangle.



On the other hand, if the pair continues straight down in impulsive fashion toward 1.0250 then we will be looking for a flat correction in red wave B where the pair can reach levels beneath 1.0240 and even around 1.0200 before bulls come back in view.

 In either case, both patterns are corrective and both suggest that USD/CAD just stopped in larger temporary pause and that sooner or later pair will turn bullish for 1.0650 maybe even 1.0700.

USD/CAD 4h Elliott Wave Analysis


What is a Triangle Pattern?

A Triangle is a common 5 wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.

Contracting triangle

  • Structure is 3-3-3-3-3
  • Each subwave of a triangle is usually a zig-zag
  • Wave E must end in the price territory of wave A
  • One subwave of a triangle usually has a much more complex structure than others subwaves
  • Appears in wave four in an impulse, wave B in an A-B-C, wave X or wave Y in a double threes, wave X or wave Z in a triple threes

What is a Flat Pattern?

A Flat is a three-wave pattern labeled A-B-C that generally moves sideways. It is corrective, counter-trend and is a very common Elliott pattern.

Regular flat

• structure is 3-3-5 • wave B terminates about at the level of the beginning of wave A • wave C terminates a slight bit past the end of wave A • appears in wave two or four in an impulse, wave B in an A-B-C, wave X in a double or triple zig-zag, or wave Y in a triple threes

About the Author

Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and He also is founder of forex services on provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website:

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