EUR/CAD – 1.4451
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.
As the single currency has rebounded again after finding support at 1.4242, suggesting a retest of recent high at 1.4418 would be seen, break there would add credence to our view that recent fall from 1.5282 has ended, bring at least a strong retracement of this decline to 1.4530-35 (50% Fibonacci retracement of 1.5282-1.3784), however, near term overbought condition should limit upside to 1.4600-10 and price should falter well below 1.4710 (61.8% Fibonacci retracement), risk from there is seen for a retreat later.
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 downside, expect pullback to be limited to 1.4300-10 and said support at 1.4242 should hold, bring another rise later. A daily close below said support at 1.4242 would defer and risk correction to 1.4200 and possibly towards 1.4155-60 but reckon downside would be limited to 1.4100, the single currency may stage another rally from there probably in Q2.
Recommendation: Buy at 1.4300 for 1.4500 with stop below 1.4200.
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.