USD/CAD Elliott Wave Analysis

USD/CAD – 136.15

USD/CAD – Wave iv from 1.0784 should hold well below 1.1848.

We have revised our preferred count on USD/CAD as indicated on our attached daily chart that early rally from 0.9059 low to 1.3066 is still treated as wave A, followed by wave B which is sub-divided as a: 1.2192, b: 1.2716 and wave c is a 5-waver with i: 1.1983, ii: 1.2506, extended wave iii: 1.0784 and wave iv is still unfolding which has either ended at 1.1655 or may extend towards 1.1815, however, price should stay below calculated resistance at 1.1848 (61.8% Fibonacci retracement of wave iii from 1.2506).

Break of 1.1200 (also below the 50% Fibonacci retracement of 1.0784 to 1.1655 at 1.1219) would indicate the wave iv correction from 1.0784 has ended, then further fall to 1.1000 would follow but it is necessary to see a drop below the support at 1.0942 to confirm the wave v of c is under way for retest of 1.0784, then towards 1.0650/60. Having said that, the wave B is still treated as a correction of the wave A from 0.9059, downside should be limited to 1.0590 (61.8% Fibonacci retracement of 0.9059-1.3066) and will bring strong rebound in wave C later this year.

On the upside, only break of resistance at 1.1983 (wave i bottom) would signal the c-leg as well as larger degree wave B has ended at 1.0784, then gain to 1.2194 (61.8% Fibonacci retracement of 1.3066 to 1.0784) would follow but it is necessary to see a daily close above resistance at 1.2506 to confirm and bring wave C rally.

To re-cap the A of (B) rally from 0.9059 low (7 Nov 2007), the A-wave is unfolding into an impulsive wave with i:0.9059-1.0380, ii ended at 0.9819, wave iii at 1.3019 followed by a triangle wave iv at 1.2026, then wave v formed a top at 1.3066 and also ended the wave A and wave B is now in progress as a-b-c.

Longer term - The selloff from 1.6194 (21 Jan 2002) to 0.9059 (07 Nov 2007) is viewed as (A) wave which is a 5-waver as labeled on the monthly chart as below, the subsequently rally is labeled as (B) with impulsive A leg of (B) ended at 1.3066, wave B of (B) is unfolding which should be limited to 1.0590 and 1.0000/05 (76.4% retracement of wave A from 0.9059 to 1.3066) should remain intact.