The Loonie dropped to 1.27 after a fast fall from 1.292. Price had earlier completed an important Elliott wave corrective pattern which lasted for about two months. How far will the bearish move be?. The following analysis is based on 9 November USDCAD Elliott wave analysis.
09 November, AtoZForex - Last week, price was at the verge of dropping after an important wave pattern completed upside. We alerted you of this possibility. Price was unable to bridge above 1.292 strong resistance. Elliott wave theory teaches us how to identify trends and corrections. This useful information was applied as price completed a corrective pattern that started early September.
When price reacted and broke downside, a double top was completed to further signal the bearishness of the near-term price action. In the last update, we had 1.24-1.25 as bearish targets before the bulls resume. Going back to the last update, we had the chart below.
USDCAD Elliott wave analysis, H1 (click to zoom)
The expected dip to 1.24-1.25 could be the 2nd leg of the long term bullish correction. If price gets to this zone, we will examine its behavior and the pattern exhibiting.
Ideally, it is expected that the drop gets to the zone of wave X triangle at 1.26-1.246 . Our next wave analysis will look at the structural behavior of this drop.
9 November USDCAD Elliott wave analysis: what next?
USDCAD Elliott wave analysis, H1 (click to zoom)
The larger bullish correction could resume once wave b (in purple) is over. The first bearish target is 1.2601 and the next are 1.2490 and 1.2464. The bullish larger correction could resume at 1.2490-1.2464. It's important to note price action at these level. Aside an a-b-c drop, there is possibility of making an impulse wave which would mean that larger bullish correction ended at 1.292. With the Elliott wave theory, it's very possible to predict price's next move in the smaller or bigger time frames. Stay tuned for the next update.
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