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Elliot Wave Analysis for USD-CAD
USDCAD is the currency pair between the US Dollar with the Canadian Dollar. This pair represents the value of the 2 most developed countries in the world, regarding their imports but especially their exports. Belonging to the major ones, just to remind you that the U.S Dollar has a total turnover of 82,3% and the Canadian Dollar has a 5%, which is a first and sixth position globally, respectively, according to the Bank of International Settlements. The total is referenced to 200% because one currency is bought from one or sold from the other. So, 100% of the total doubled to 200%.
The pair is traded at 1,2636 points now, while its top and bottom price were at 1,6184 in January 2002, and at 0,9057 in November 2007.
Monthly Range: Higher in wave ((Y)) of b
The monthly trading chart (log scale) will help us to figure out the trend of the pair. After the completion of the (III) Super Cycle wave, we saw a sharp decline, labeled as the a Cycle wave. This wave is part of the (IV) Super Cycle wave, which as a fourth wave, usually forms a sideways corrective pattern, according to the guidelines of Elliot wave theory. Thus, the most acceptable pattern is a flat or a contracting triangle.
So far, the a Cycle could be seen as a 3-wave sequence, constructed by an ((A)) – ((B)) – ((C)) – undrawn in the chart – Primary degree waves, with the ((A)) being a 9 non-extended waves, the ((B)) as a shallow upward rally, and the ((C)) as a single sharp downward move to complete the low at 0,9057.
After the completion of the a Cycle though, to construct a flat or a triangle, the pair had to climb, and that’s what it did actually. The 3-wave ((W)) and the 3-wave ((X)) Primary degree waves, for making the ((W)) – ((X)) – ((Y)) structure of the b Cycle wave, justify the logic of a flat or a triangle. Of course, the ((W)) and the ((X)) has ended, and we are waiting for the completion of ((Y)) Primary of b Cycle higher.
Weekly Range: Higher in wave (A) of ((Y))
Looking at the weekly trading chart (log scale), we labeled the subdivision waves of ((W)), as (A) – (B) – (C) Intermediate waves, and in the same manner, the ((X)) looks like the same, but not as zig-zag formation, as a flat one.
As the chart is shown, it is expected, according to our basic scenario to the ((Y)) Intermediate of b Cycle, to be completed higher. Even if the pair could make all-time highs, we are positively sure, that the corrective pattern has more to give before the (IV) Super Cycle finish. And this is the final c Cycle of the (IV) Super Cycle wave, which if eventually, the (IV) is flat, then the c Cycle will be a motive wave, meaning with a 5-sequence count. If the (IV) is a triangle, then every wave till the last e – a-b-c-d-e for triangle – will have a 3-wave mode.
Daily Range: Turning Higher for wave (iii) of ((iii)) of 3
Coming more deeper into the daily trading chart (log scale), we zoomed in after the completion of ((X)) Primary of b Cycle wave. The market is trending with a lot of fluctuations, but with one characteristic. It makes higher highs and higher lows, which means that we expect an impulse or a diagonal to take place, that’s why we are counting the chart with numbers and not with letters, as previously were doing.
So, we started with a 1-2, 1-2 structure of an impulse, as of 1 and 2 Minor waves of the (A) Intermediate wave of the ((Y)) Primary wave of the b Cycle wave. The 3 Minor wave is subdivided into its ((i)) – ((v)) Minute waves and the ((iii)) in turn is subdivided into its (i) – (v) Minuette waves. The supports from the higher lows of this chart are at the end of the ((X)) (1,20070 points), at the end of the 2 Minor wave (1,22885 points), and at the end of ((ii)) Minute wave (1,24028 points).
We stay positive for the uptrend, to finish first the (IV) Super Cycle and then to the last (V) of the same degree move up to 1,82000 points.
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