German DAX made a five-wave overlapping affair recently in wave 4, which looks like a triangle correction. If that is the case, then we know that one more push lower can follow on the DAX. Ideally final wave 5 is already in motion and can search for a base near the Fibonacci ratio of 161.8 or 200.0.
A Triangle is a common 5-wave pattern labeled A-B-C-D-E that moves counter-trend and is corrective in nature. Triangles move within two channel lines drawn from waves A to C, and from waves B to D. A Triangle is either contracting or expanding depending on whether the channel lines are converging or expanding. Triangles are overlapping five wave affairs that subdivide 3-3-3-3-3.
Triangles can occur in wave 4, wave B, wave X position or in some very rare cases also in wave Y of a combination
German DAX, 1H
Let’s now move on to the next one, the USDCAD.
USDCAD looks to be trading in final stages of an impulsive wave c) as part of a higher degree wave four. Current rally can so see limited upside near the Fibonacci ratio of 200 and later make a new minimum three-wave reversal lower. A later breach below the 1.2551 level would confirm a change in trend.
USDCAD, 1H
