USDCAD is about completing an impulse wave upside at a good resistance. It seems a bearish pullback will happen soon before price resumes upside. The following shows this possibility based on 26 April USDCAD daily Elliott wave analysis.
26 April, AtoZForex -The rally continued after after a short dip. The rally was projected as an impulse wave. Impulse wave are five non-overlapping waves that are usually followed by a 3-wave correction. Impulse waves are the easiest and the most basic Elliott wave patterns. In the last update, we expected price to dip after noting a complete impulse wave. The shallow dip meant that the correction didn’t come up. The chart below was used in the last update.
The chart above shows that the move from 9th May to 13th April is quite corrective – a zigzag pattern. The impulsive rally from wave (C) shows price is ready to resume upside probably. At 1.353, a resistance, an intraday dip could be seen to 1.334-1.3375 before a strong rally above 1.353. The corrective dip is expected to stay above 1.322 for this view to be valid.
The dip didn’t look like a correction. It shows that the 3rd wave would be more extended. Often times, wave 1, 3 or 5 of an impulse wave is extended. In this case, the 3rd wave is extended as shown in the chart below. If this impulse wave has completed, a 3-wave bearish correction is expected.
26 April USDCAD daily Elliott wave analysis: what next?
Price is in the last stages of the impulsive rally. 1.3632 and 1.3696 (61.8% and 100% projection of wave i-iii from iv are projected level of reversal respectively). If price rallies further, the next level to watch out for reversal is 1.3699 which means that wave v will be the extended wave. 1.3632 is stronger as a level of reversal for two reasons: i) wave iii is often the extended wave ii) its a level of resistance. A dip is expected soon before the rally resumes. More updates will come later.
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