12 June EUR CAD Elliott wave analysis: 500 Pips setup?

EURCAD has completed an Elliott wave pattern that could lead to a bearish move for more than 500 Pips. What pattern completed and how probable is the move?. The Following explains based on 12 June EUR CAD Elliott wave analysis.

12 JuneAtoZForex - Sometimes as an Elliott wave trader, you can focus more on completed patterns than the wave count. The Wave count is meant for forecast while trade opportunities are spot when a wave pattern completes. The good thing about these patterns is how frequently they get it right. The wave count is also important, it shows us the position of a complete pattern in a larger framework and how far price should move. In this article we look at a complete pattern in EURCAD and how we should expect price to react.

To remind us, Elliott wave theory has five basic patterns - the Impulse wave, Ending/leading diagonal, Flats, Triangles and Zigzags. The first two are trendy waves/patterns - they move in the direction of the trend of a particular degree. At the end, a 3-wave correction (the last three patterns) are expected. At the end of a correction like a flat, triangle or zigzag, the trend is expected to continue. In other words, the trendy patterns are reversal patterns while the corrective patterns are continuation patterns. Of course, this is the basics and one needs better mastery to grasp all the rules, guidelines and variations. It could take more time than other technical methods, but it's rewarding. The chart below shows the price chart of EURCAD.

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12 June EUR CAD Elliott wave analysis: 500 Pips setup?

12 June EUR CAD Elliott wave analysis EURCAD Elliott wave analysis, H6 (click to zoom)

The chart above shows a complete zigzag pattern. At the end of wave C, was an ending diagonal pattern. We have a pattern completing a bigger pattern. The C-wave is also around the 161.8% Fib-extension of wave A. A good bearish breakout will be required to see price going down for more than 500 Pips. It's interesting to see how price reacts to these patterns. The patterns are not perfect but they give you a comfortable edge over a good period of time with proper risk management.

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