USDCAD is rejecting a break above 1.322. Will price resume downside? The following 16 July USDCAD Elliott wave analysis looks at technical insights based on Elliott wave theory.
Last week, USDCAD hit an important intraday Fibonacci zone at 1.3188-1.322 and was resisted after a strong rally. In technical terms, the rally to the Fib-zone was corrective. This correction followed a leading diagonal pattern completed at 1.3070. It’s expected that price would continue the bearish move this week. The bearish target is 1.25 and price is much likely to complete a bearish impulse wave as the first leg of the expected large bearish correction. How likely is this? The chart below was used in the last update.
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.
16 July USDCAD Elliott wave analysis: what next?
Price stays below the zone as it tries to resume the bearish move.It’s now heading to the 1.3070-1.3122 support zone. A break below the zone would confirm the continuation of the bearish move down to 1.3. The bearish target remains 1.25 but the move, if it happens, might no be very direct. The forecast above would only be invalid if price returns to break above 1.322. If that happens, we might probably going to see a much deeper bullish correction close to 1.33. Stay tuned for the next update.
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