EUR/CAD – 1.4939
As euro has maintained a firm undertone after breaking above resistance at 1.4980, adding credence to our view that the fall from 1.5259 top has ended at 1.4478 last month, hence consolidation with mild upside bias remains for gain to 1.5050, then 1.5100-10, however, reckon near term overbought condition would limit upside to 1.5155-60 and price should falter well below said resistance at 1.5259, bring 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 initial pullback to 1.4890-00 and possibly 1.4835-40 cannot be ruled out, reckon downside would be limited to 1.4790-00 and bring another rise later. A drop below support at 1.4709 would suggest top is formed instead, bring test of previous resistance at 1.4684 but break there is needed to signal the rebound from 1.4478 has ended, bring further fall to 1.4620-30, then 1.4580-85, once this level is penetrated, this would confirm and signal another leg of decline from 1.5259 is underway for retest of 1.4478 first.
Recommendation: Stand aside for this week.
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.
