EUR/CAD – 1.4984
Although the single currency rallied to as high as 1.5146 last week, lack of follow through buying on break of previous resistance at 1.5076 and the subsequent retreat to 1.4868 suggest top is possibly formed there and consolidation mild downside bias is seen, below said support at 1.4868 would add credence to this view, bring further fall to 1.4800, then towards 1.4740-50. Looking ahead, only a drop below support at 1.4680-85 would retain bearishness and signal the rise from 1.4441 has ended, bring further fall to 1.4635 support, then towards 1.4550-55 which is likely to hold from here due to near term oversold condition.
Our latest preferred count is that larger degree wave [C] from 1.3289 as well as circle wave B ended at 1.7509 in Dec 2008 with (A): 1.6325, (B): 1.4719 followed by wave (C) at 1.7509, hence circle wave C is unfolding with wave 1 ended at 1.5186 (diagonal wave 1), wave 2 at 1.6096, impulsive wave 3 has ended at 1.2451, followed by wave 4 at 1.4380, in view of recent strong rebound, we are now treating the wave 5 as well as larger degree circle wave C has ended at 1.2129, hence (A)-(B)-(C) correction has commenced from there with impulsive wave (C) now unfolding and indicated initial upside target at 1.6000 had been met and reckon 1.6500 would hold.
On the upside, whilst initial recovery to 1.5050 cannot be ruled out, reckon upside would be limited and said resistance at 1.5146 should hold, bring another retreat. Above said resistance would signal the rebound from 1.4441 is still in progress for further gain too 1.5200, having said that, price should falter below previous chart resistance at 1.5259 and bring another decline later.
Recommendation: Sell at 1.5050 for 1.4850 with stop above 1.5150.
On the bigger picture, our long-term count on the monthly chart is that a big sideways consolidation from 2000 low of 1.2557 has possibly ended at 1.7509 as circle wave B with [A]: 1.6976 ( (A): 1.4513, (B): 1.2612, (C): 1.6976), wave [B]: 1.3289 is a double three with 1st a-b-c: 1.5384, x: 1.6709 and 2nd a-b-c: 1.3289. As indicated above, the wave [C] has ended at 1.7509. The selloff from there is now unfolding which itself should be labeled as an impulsive wave with wave 1: 1.5186 (diagonal wave 1), followed by wave 2: 1.6096 and wave 3: 1.2451, wave 4: 1.4380, wave 5 as well as larger degree circle wave C has possibly ended at 1.2129 and major correction has possibly commenced for retracement of recent decline towards 1.4000, then 1.4180-90 (38.2% Fibonacci retracement of 1.7509-1.2129). Below said support at 1.2129 would risk weakness to psychological support at 1.2000 and then 1.1851 (50% projection of 1.7509-1.2451 measuring from 1.4380) but reckon 1.1500 would remain intact, bring reversal later.