The Canadian dollar reversed lower against the U.S. dollar at the end of last week from a trendline connected from July highs, which suggests that the rally from 1.0180 was corrective a leg. If that is the case, then the pair could be forming a bigger and more complex correction than we first thought. We are now observing the idea of a triangle with wave E underway back to 1.0300. This will be a final leg in the pattern, so be aware of a bullish period after completed pattern.
USD/CAD Elliott Wave Daily
On the 4h chart, USD/CAD has turned bearish at the end of last week after a broken trendline connected from Oct. 22 low. This break suggests that the rally from 1.0180 was a complex double zigzag, labeled as (w)-(x)-(y) which is a corrective move that represents a wave D that is part of a larger triangle pattern. If that is the case then the pair is now moving down for a three wave decline in wave E, a final leg of a pattern that may look for a support around 1.0240-1.0280.
USD/CAD Elliott Wave 4h
Elliott Wave Education: 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.
- structure is 3-3-3-3-3
- each subwave of a triangle is usably 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