Tuesday, December 23, 2014

USDCAD: Will you miss Its Next Destination?

I have the deep gladness of following this currency pair since July 2014 almost flawlessly; involved in almost the major and minor moves up and down using intraday and long term Elliot wave analysis; while still maintained the bullish bias.

In the last comprehensive analysis ,I forecast a move to 1.1850 and price has not stopped moving up since. A good trader must be as dynamic as price itself. 

I had to take on a new idea. I present to you another analysis that could turn to be a compass for Usdcad movement in the first half of 2015.

Starting with the long term chart, it is very clear how a bearish impulsive move that started in January 2002 ended with a “truncation (this happens when the fifth wave doesn’t go beyond the starting swing of wave 3)” in August 2011 ( a period of nine and half years). Price has since that time been correcting as expected.

The ending of the first leg ( a clear impulsive move) of this corrective move is what I discussed in the November 20 forecast. We have seen price rally well. The rally could end soon. How soon?



Let’s take a look at the lower time frame for a closer look.

Price has formed three successful waves as part of the impulsive move to terminate the first leg of the bullish correction mentioned in the long term analysis above. 

The fourth is presently forming- a likely flat (flag) corrective formation, which when broken should complete the impulsive move.

If this flag is broken upside, 1.1750-1.1800 resistive region could contain the rally and send price down in a probable move to 1.06xx region and below. 



If price refuse to break the channel and dips below the channel line, it could mean that the fourth wave is going to be a complex correction which should stay above 1.1460 to make this wave analysis valid, otherwise, we might be forced to come up with something different to explain what price is doing.

I will update you as it goes.

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