Canadian Dollar Will Fall Across the Board

Patterns on multiple Canadian dollar crosses indicate, with a high probability, that the Loonie is about to fall across the board. We have determined risk and target levels for multiple CAD pairs.

The USDCAD is entering a 3rd wave (or C wave) within the bull cycle from .9710. The circled area on the chart is the advance from .9997, which is in 5 waves (view the rally on a 60 or 15 minute chart to view the rally in detail). This development is evidence that the drop to .9997 completed wave Y as a truncation (failed to register a new low). As such, a bullish bias is warranted against .9997 (an unexpected drop below there would require us to reassess). The minimum objective is above 1.0324.

The decline from 1.6324 (March high) in the EURCAD is viewed as the correction of the 5 wave advance from 1.4410. The decline reversed at 1.5395, a level that is defended by the 3/19 low at 1.5459 and the 38.2% of 1.4410-1.6324 at 1.5367. Bigger picture, the decline from 1.6324 is probably a 4th wave within the 5 wave advance from 1.4162. Therefore, a 5th wave should complete the cycle. The minimum objective is above 1.6324. Risk is tight at 1.5395.

The series of lower lows and lower highs since the November 2007 top at 125.55 keeps us looking for lower prices regarding the CADJPY. More importantly, declines have occurred in 5 waves and advances have unfolded slowly as complex corrections (w-x-y). The trend is considered down as long as price is below 109.62. The minimum objective is below 95.68 but additional objectives are at 94.61 and 89.73 (Fibo extensions). You may want to re-visit the Yen and Stocks article from last week when considering Yen trades.

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