EUR/CAD Elliott Wave Analysis

EUR/CAD – 1.5811

EUR/CAD: Wave A from 1.7509 has possibly ended at 1.5186.

Although the single currency rose to as high as 1.6001 this Monday, as the currency pair has retreated after faltering below resistance at 1.6096, suggesting further consolidation would take place, however, downside should be limited to 1.5525 (61.8% Fibonacci retracement of 1.5231-1.6001). As we are still keeping our count that low has possibly been formed at 1.5186, reckon renewed buying interest would emerge above 1.5500 and bring another rebound later. Above 1.6001 would bring test of 1.6096, once this level is penetrated, this would add credence to our mildly bullish count and bring correction towards resistance at 1.6329.

Our preferred count that larger degree wave [C] from 1.3289 has ended at 1.7509 in Dec 2008 with (A): 1.6325, (B): 1.4719 followed by wave (C) at 1.7509, hence wave [D] (also a 3-legged move) has taken place from there and (A) leg is possibly unfolding as a diagonal triangle with a: 1.7509-1.5642, b: 1.6973, c: 1.5346, d: 1.6329 and e leg has possibly ended at 1.5186.

Looking ahead, A rise above pivotal resistance at 1.6329 would confirm the entire wave (A) from 1.7509 has ended at 1.5186 and then the (B) leg of would bring stronger rebound to 1.6500 and then towards 1.6622 (61.8% Fibonacci retracement of the entire wave (A) from 1.7509-1.5186).

On the downside, below 1.5500 would risk fall to 1.5390/00, however, only break of support at 1.5186 would extend the decline from 1.7509 marginally to 1.5000 but this final leg of the larger degree (A) wave should be limited to 1.4825 chart support and bring wave (B) rebound in late Q4.

On the bigger picture, our long-term count on the monthly chart is that a big sideways triangle consolidation is taking place from 2000 low of 1.2557 and is labeled as follows: [A]: 1.6976 with (A): 1.4513, (B): 1.2612, (C): 1.6976, [B]: 1.3289 is a double three with 1st a-b-c: 1.5384, x: 1.6709 and 2nd a-b-c: 1.3289. As indicated above, the wave [C] has ended at 1.7509 and [D] leg is under way with (A) leg of [D] possibly ended at 1.5186 or may extend to 1.4901 (61.8% Fibonacci retracement of wave [C]) but support at 1.4719 should hold. In the event euro rises above 1.6973 resistance would suggest the [C] leg is still unfolding and retest of 1.7509 cannot be ruled out but break there is needed to extend rise to 1.8000.