USDCAD has been bullish so far this week with a fast corrective move upside. Will price continue the bearish move or stays upside? The following 12 July USDCAD Elliott wave analysis gives useful clues.
The Loonie has been on the upside this week after a rallying dollar. After the BOC statement yesterday, price spiked downside but quickly spiked back upside and even gained more. This move was quite expected after price completed a reversal pattern in a strong support zone. At the zone, we counted the end of the 1st wave of an impulsive wave (a) of a probable larger zigzag pattern. We started this wave count when price completed a leading diagonal at 1.3385 last week and dropped after making a double top. In the last update, we expected the current corrective rally to reach 1.3226-1.3188 Fibonacci correction zone. The chart below was used in the last update.
The current rally is expected to be corrective. Price is much likely going to drop further as we complete an impulsive wave a (circled). The invalidity price level for this forecast still remains at 1.3385. Only a break above 1.3385 would render this forecast invalid. The current rally could reach 1.3188-1.3226 Fib-ratio zone before dropping further. A bridge below the 1.3070-1.3122 support zone will be required for the fast bearish move to 1.28-1.29 and then probably to 1.25.
12 July USDCAD Elliott wave analysis: what next?
Price broke upside and rallied to the expected Fib-ratio zone. We will be expecting the lower boundary of the zone (1.3188) to be broken downside. The impulsive wave (a) of the larger corrective pattern which is expected to extend to 1.25 has been counted above. We could see price dropping back to the support zone at 1.3122-1.3070 and probably break below it for lower prices in the coming days. A break above 1.3226 would mean the correction would be bigger than expected. However price moves, it’s expected to stay below 1.3385 to validate our view. Stay tuned for the next update.
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