USD/CAD Elliott Wave Analysis

USD/CAD – 1.0669

USD/CAD – Wave v of c has possibly ended at 1.0206

Although the greenback broke above resistance at 1.0748/50 which suggests the wave ii correction from 1.0871 has ended at 1.0225, lack of follow through buying suggests minor consolidation would be seen and pullback towards 1.0540/50 cannot be ruled out, reckon 1.0437 (61.8% Fibonacci retracement of 1.0225 to 1.0781) would contain downside and bring another rally. Above resistance at 1.0781 would signal wave iii is possibly taking place and bring retest of 1.0871 resistance later.

To recap our preferred count is that the A of (B) rally from 0.9059 low (7 Nov 2007) unfolded 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. Wave B is unfolding as an a-b-c and 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 ended at 1.1725. At the moment, we are still keeping our preferred count that wave v has ended at 1.0206 and the rise from 1.0206 to 1.0871 is tentatively treated as wave I with wave ii possibly ended at 1.0225.

On the upside, it is necessary to see a breach of resistance at 1.0871 to confirm our bullish count that wave iii is under way for gain to resistance at 1.0996 but a sustain breach above there is needed to encourage for headway to resistance at 1.1126.

On the downside, loss of 1.0415-37 (previous minor support and 61.8% Fibonacci retracement) would risk weakness towards 1.0300 but only a daily close below 1.0206 would signal recent decline is still in progress for weakness towards 1.0005 (76.4% Fibonacci retracement of 0.9059 to 1.3066). However, sharp fall below there would not be repeated and reckon downside should be limited to 0.9862 (100% projection of 1.1725-1.0591 measuring from 1.0996).

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 1.0000/05 (76.4% retracement of wave A from 0.9059 to 1.3066) and 0.9800 should hold.