EUR/CAD – 1.5075
EUR/CAD: Wave 4 ended at 1.4380 and wave 5 as well as circle wave C has possibly ended at 1.2129, major (A)-(B)-(C) correction has commenced and indicated target at 1.6000 had been met.
Although the single currency did find renewed buying interest at 1.4969 and has resumed recent upmove in line with our bullish expectation (our long position entered at 1.5000 met target at 1.5250), lack of follow through buying and current retreat from 1.5259 suggest consolidation below this level would be seen and pullback to 1.5000 cannot be ruled out, however, break of support at 1.4969 is needed to signal top is formed, bring retracement of recent upmove to 1.4900 but support at 1.4825 (previous 4th of a lesser degree) should hold from here.
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 recovery to 1.5160-70 cannot be ruled out, upside should be limited to 1.5200-10 and bring further consolidation below 1.5259. Only a break of this level would revive bullishness and signal recent upmove has resumed for headway to 1.5350 and possibly 1.5400 but price should falter well below 1.5500, risk from there is seen for a retreat later.
Recommendation: Long entered at 1.5000 met target at 1.5250 with 250 points profit.
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.