USDCAD dropped last week following a bearish Dollar and a positive CAD core retail sales. How far could this dip continue? The following 23 July USDCAD Elliott wave analysis have clues.
At the end of last week, we saw Dollar dropped very fast. USDCAD, before the fall of Dollar, had completed a double zigzag bullish corrective pattern. In the past updates, we had discussed the strong possibility of the Loonie to get attracted to the 1.25 bearish target. In the last update, we expected price to drop based on Elliott wave theory. A bearish impulse wave from 1.3385 ended at 1.3060 early this month and a 3-wave correction followed. We thought the correction had ended and price should drop as explained in the chart below from the last update.
Price stayed above the resistance zone slightly to form a temporary top at 1.329. A much better double zigzag pattern has completed at the same price zone. If price stays below 1.329, we should expect a break below 1.323 to trigger a bearish move down to the base of the channel. If the channel is broken downside, a dip below 1.3060 should follow. The long term bearish target remains at 1.25. If price moves as expected, we will count a bearish impulse wave from 1.329 top.
23 July USDCAD Elliott wave analysis: what next?
Price stayed below 1.329 and broke below 1.323 to resume the downward move. Price is now at the entrance of the 1.3122-1.2070 support with an emerging sideway triangle pattern. It’s expected to go deeper to 1.3100 or 1.3070-1.3060 before starting a bullish correction. We would be counting a 5-wave dip. The 1st wave is close to completion. Stay tuned for the next update.
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