USDCAD dropped below 1.3 briefly yesterday, before a big rally. The following 31 July USDCAD Elliott wave analysis looks at what could happen next.
USDCAD broke below 1.3020 intraday support yesterday, down to 1.2995. We had a price reversal zone at 1.30-1.2950. We expected price to rally from this zone as some price patterns are projected to end at the zone. Price hit the zone and but didn’t go deep. The dip below 1.3020 did not last. Price rallied swiftly to 1.3050 from 1.2995 low. The chart below was used in the last update.
Price is entering into the pattern reversal zone. The move is coming fast, so it’s important to wait for a significant bounce. Price could dig far deeper to 1.29 after breaking below 1.295 to invalidate our forecast. But, if price bounces off the reversal zone, we might see it rally back to 1.31-1.315 or maybe higher.
31 July USDCAD Elliott wave analysis: what next?
Price is probably making a reversal bottom with ‘neckline’ at 1.3090. A break above 1.3090 should be enough to confirm this bullish scenario. Our preferred projection is a bullish correction limited below 1.3290 as there is a larger bearish correction with target at 1.25. On the other hand, the drop from 1.3385 to 1.2995, though very shallow, might be all the bearish correction needed before the long term bullish move resumes. A break above 1.33 would look to encourage this scenario. Stay tuned for the next update.
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