EUR/CAD Elliott Wave Analysis

EUR/CAD – 1.3828

EUR/CAD: Wave (A): 1.7509 - 1.5186, (B) - 1.6010 and (C) should extend to 1.3687

Recent wave (C) selloff is still in progress and bearishness remains for weakness to indicated downside target at 1.3773 (100% projection of 1.7509 to 1.5186 measuring from 1.6096) and later to 1.3687 (100% projection of wave (A) from wave (B)).

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 was a diagonal triangle with a: 1.7509-1.5642, b: 1.6973, c: 1.5346, d: 1.6329 and e leg ended at 1.5186. The wave (B) ended at 1.6010 with a: 1.6096, b: 1.5231 and a short c at 1.6010, wave (C) is likely to resume after consolidation and downside target is still pointing at 1.3773 (100% projection of 1.7509 to 1.5186 measuring from 1.6096) and then 1.3687 (100% projection of wave (A) from wave (B)) but price should stay well above wave [B] trough at 1.3289.

On the upside, whilst recovery back to 1.4000 cannot be ruled out, renewed selling interest should emerge around 1.4100/10 and bring such a decline. Only a daily close above resistance at 1.4435/40 would suggest a temporary low is in place, then correction to 1.4678 would follow.

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.