USD/CAD Elliott Wave Analysis

USD/CAD – 1.0256

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

As the greenback broke below indicated support at 1.0225, calling for a review of our previous bullish count but it is still 50/59 chance that entire wave B ended at 1.0206 earlier or only a wave iii ended there, so the pivotal point remains at 1.0206, below there would signal only wave iii ended at 1.0206 followed by a triangle wave iv, then wave v may extend 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).

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 still unfolding.

On the upside, although recovery to 1.0400 and 1.0500 cannot be ruled out, above 1.0680/85 is needed to signal wave ii correction has possibly ended and bring stronger rebound to 1.0800. Looking ahead, it is necessary to see a breach of resistance at 1.0871 to revive 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.

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.