EUR/CAD Elliott Wave Analysis

EUR/CAD – 1.5010

 

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 risen again after finding renewed buying interest at 1.4733 late last week, adding credence to our view that low has been formed earlier at 1.3784 and bullishness remains for there rise from there to bring a stronger retracement of recent decline to 1.5050, then 1.5140-50, however, near term overbought condition should prevent sharp move beyond 1.5215-20 (61.8% Fibonacci retracement of 1.6106-1.3784), 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, whilst pullback to 1.4900-10 is likely, reckon downside would be limited to 1.4800 and renewed buying interest should emerge above 1.4750-60 and bring another rise to aforesaid upside targets. Only below previous resistance at 1.4600 would abort and signal top is formed instead, bring weakness to 1.4530-35 but downside should be limited to 1.4480-85 and price should stay well above support at 1.4397, bring another rally later. 



Recommendation: Buy at 1.4770 for 1.5050 with stop below 1.4670.

 
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.