USDCAD is getting rejected gradually above 1.2950. Will price rally soon? the following 1 August USDCAD Elliott wave analysis looks at what could happen next.
USDCAD has been quiet this week with a strong USD offsetting a fast dip that could have followed a strong CAD (after a green GDP report). We expected 1.2950-1.3 to be a battle zone for the bulls and the bears. More that two reversal price patterns are ending at the zone. Who is more likely to win the battle? The following chart was used in the last update.
Price is probably making a reversal bottom with ‘neckline’ at 1.3090. A break above 1.3090 should be enough to confirm this bullish scenario. Our preferred projection is a bullish correction limited below 1.3290 as there is a larger bearish correction with target at 1.25. On the other hand, the drop from 1.3385 to 1.2995, though very shallow, might be all the bearish correction needed before the long term bullish move resumes. A break above 1.33 would look to encourage this scenario
1 August USDCAD Elliott wave analysis: what next?
From wave (b), we have a bearish impulse wave to complete wave (c). Just at the zone, price is making an ending diagonal mouth which further supports a big bullish move. The extent of this rally won’t be much known now until price gives more information. If the correction from 1.3385 would continue, we should see a corrective rally up to 1.32-1.33. If the rally is impulsive, we might see price above 1.3385 after a few weeks. A break below 1.2975 would invalidate this forecast and probably would see price digging further. Stay tuned for the next update.
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