Time for a breather for Canadian dollar: Elliott Wave

The Canadian dollar is moving sharply to the upside against the U.S. dollar (FOREX:USDCAD) for the last couple of weeks since the pair managed to move above the 1.0660 resistance zone, back from 2011. Sharp and big moves in short period of time like this one on USD/CAD usually occur in the middle of wave three of an impulsive price action. As such, we adjusted the wave count and now are tracking an incomplete five wave recovery, either in wave (C) or (3). In both cases we expect higher levels, up to 1.1600/1.1700 as long as 1.0600 level holds.

USD/CAD Weekly Elliott Wave Analysis

USD/CAD Daily

USD/CAD seems to be trading in the middle of an impulsive red wave 3) from a weekly chart that needs to be made by five subwaves. That's still not the case from the 1.0177 swing region, so we expect to see even higher prices in 2014. At the moment we are tracking a subwave 3 that may stop around the 1.1200 figure.

USD/CAD Daily Elliott Wave Analysis

USD/CAD four-hour

USD/CAD has moved to a new high as expected, into the final stages of blue wave (v) that may completed a black wave 3 around 1.1200 figure. At the same time we also see signs of a bearish divergence on the RSI that usually occurs during the late stages of an extended structure, so we must be aware of a reversal, but only temporary into another corrective phase.

USD/CAD 4-hour Elliott Wave Analysis

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 TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/

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