After a strong rally yesterday, USDCAD rallied swiftly at the breakout of an intraday wave pattern. The following 18 July USDCAD Elliott wave analysis looks at what could happen next.
USDCAD went upside yesterday to make a much higher complex correction. In the last update, we expected a bullish breakout rally to 1.33-1.335. Price is getting close to this level where we could anticipate bearish reversal. Despite the swift rally, price still looks corrective from 1.3060 low. Will price resume the bearish move again? The chart below was used in the last update which was posted yesterday.
The drop from 1.3225 looks corrective thereby making a case for a more complex bullish correction. There is a possibility of a double zigzag bullish pattern if price breaks above the intraday channel shown in the chart above. If the channel is broken upside, we should see price heading above 1.3225 up to 1.33. But, if there is no significant bullish breakout, we might see price coming back to 1.3060 and the last forecast should play out.
18 July USDCAD Elliott wave analysis: what next?
The rally happened as expected. Price is expected to complete a double zigzag reversal pattern before it resumes the 1.3385-1.3060 bearish trend. There is an interesting Fibonacci confluence level just few pips above the double zigzag channel roof. 61.8% Fib-retracement of 1.3385-1.3060 drop and the 100% Fib-projection of wave w from x (circled). If there is a reversal signal at this level, we should see a fast drop back to 1.3060 and below. If price rallies swiftly above 1.3260-65, the bullish move would continue to 1.3357. Stay tuned for the next update.
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